Also, MSRP is absolutely not designed to make the most profits in a brick and mortar environment. It limits what a brick and mortar environment can do.... Anytime a store wants to go over that MSRP, it does so at the risk of alienating customers because they can see what the product "should" sell for according to the company that manufactured it. Thus brick and mortar stores get squeezed between what the distributor (sometimes the company sometimes a middleman) sells to the store at and what they can charge at the upper end.

This is pretty much true.

Also this is a good bit I liked answering why MRSP's can be high.

"I set pricing for an electronics company, and while guns aren't electronics, the same principles apply.

A better question would be "Would you rather have a high MSRP which gets discounted, or have low MSRPs that get marked up because the thin margin isn't enough for the dealer?"

As a retail shop you can't just blindly trust in the MSRP. The number one consideration any retailer must consider about pricing a product, even before operation costs is what will the market bear: meaning, what will people actually pay for such a product.

Amazon is competition that most brick and mortor stores are not used to but can't be ignored. I will pay 14.99 for a X-wing about 2-3 bucks more then amazon. I will pay 19.99 for a Armada fighter pack, about 5 bucks more. I will not pay 99.99 for a Starter set when amazon can fetch it for 69.99. that is $30 bucks for crying out load!

And before people start accusing me of ignoring your post?

Look, I could get everything I need I line for cheaper than in a store, anyone can. One can buy food, clothes, entertainment, etc online. So why don't people do just that?

The issue is You are considering MSRP as a rip off, its not. MSRP is what people should sell things for to make the most profits in a brick-and mortar environment.

Here is a great link that explains the difference between online vs brick and motar.

http://www.investopedia.com/financial-edge/1111/comparing-online-and-in-store-prices.aspx

One of my favorite quotes from that article I just links

"Online merchandise doesn't have to be displayed in an expensive storefront and often doesn't need to be held in a warehouse - it can be shipped directly from the manufacturer to the customer."

Do remember that I am not condemning people for buying online, I am just defending their right to sell at MSRP and why they do such

Getting food and clothes at a store has many advantages to online. Amazon has been searching for a way to compete with clothes right now as it knows there is big money in it. For now even if the prices are cheaper many of those items still have greater value in a store where they can be inspected, purchased quickly, or tried on first.

Also that bit about MSRP is a strawman argument fallacy... please don't make those.

I will not pay 99.99 for a Starter set when amazon can fetch it for 69.99. that is $30 bucks for crying out load!

And most gaming stores would be fine with you picking up a core set somewhere else, if you buy expansions at the store.

Many core sets have little or perhaps even no profit for the publisher of the game. I can't imagine that FFG makes much off an X-Wing core set, at least compared to expansions. Privateer Press has a all-in-one box set that has $200+ worth of stuff in it, for $140.

But they're willing to take a hit on a core set because that means you're more likely to buy expansions. LGS' should see that the same way. Better to have someone in the store playing the game, and buying expansions who bought the core set online then not have them as a customer at all.

The issue is You are considering MSRP as a rip off, its not. MSRP is what people should sell things for to make the most profits in a brick-and mortar environment.

Getting food and clothes at a store has many advantages to online. Amazon has been searching for a way to compete with clothes right now as it knows there is big money in it. For now even if the prices are cheaper many of those items still have greater value in a store where they can be inspected, purchased quickly, or tried on first.

Also that bit about MSRP is a strawman argument fallacy... please don't make those.

Why is the bit about MSRP a strawman argument?

Maybe the MSRP is not the ideal price that a store could sell for, but it is nevertheless a good target price. Guardian actually marks up one penny to round off the price to an even number.

It's true that LGSs in a competitive environment could mark down their prices to compete with eachother about prices. Maybe it's the case that the MSRP allows stores to arrive at a tacit agreement that results in a de facto cartel. But let's examine the logic here.

What is the true supply & demand equilibrium price of a product, and is it above or below MSRP? Reiryc and Beatty seem to agree that there are regional variations by market, and that sounds about right to me too. Or, more importantly, how would a store know what that equilibrium price is for their market and how elastic that price might be?

It seems to me that MSRP provides the stores with an excuse to not bother thinking about it too hard, and use their time in another productive capacity. Also, it does allow the stores to have their de facto cartel. Furthermore, if the product is not all that price elastic, then it really shouldn't matter all that much.

As you've argued, I do think that when you get to the bigger products (e.g. the Core Set) the product becomes more price elastic, and people do go for the online retailers. But once they've crossed the threshold, they come back to the stores for the expansions. In that case, there may be an argument for stores starting to price compete on the core sets. However, maybe they know that they have a fiercely loyal customer base who will spend that $30 extra, and doing so is worth the lost sales, given their margin multiplied by sets sold. It's also a clear way for them to identify who their loyal customers are.

Given all of this, as well as a side conversation that I had with one store manager, I don't get the sense that they expect to sell all that many core sets, but expect to make their money off the expansions. It may also be that their cost for the core set is closer to MSRP than it is for the expansions, because of all the stuff that the core set includes. However, I don't know what their cost for the Core is.

Stores pay 55% MSRP for everything in Wave 1 Mikael, core included. Just an FYI cuz you said you weren't sure

My FLGS gave me a 20% discount on all my Wave 1 stuff.

Mine gave me 10% off on all "big" ships.

Why is the bit about MSRP a strawman argument?

It is simply not my argument. Kinda like if I said "You should check the side effects of medicine to see if it is worth the risk" And he argued I hated all medicine.

I don't mind MSRP as a concept or as a simple pricing guide. I do however think SOME MSRP's are incorrect or noncompetitive with the market and should be considered as only suggestions.

and that sounds about right to me too. Or, more importantly, how would a store know what that equilibrium price is for their market and how elastic that price might be?

Very much not easy but if you know there is a lot of costumer interest in the product and you fail ot sell any... mistakes were probably made.

I would say any situation were amazon had the item for $20 cheaper, might be worth further consideration.

It seems to me that MSRP provides the stores with an excuse to not bother thinking about it too hard, and use their time in another productive capacity. Also, it does allow the stores to have their de facto cartel. Furthermore, if the product is not all that price elastic, then it really shouldn't matter all that much.

As you've argued, I do think that when you get to the bigger products (e.g. the Core Set) the product becomes more price elastic, and people do go for the online retailers. But once they've crossed the threshold, they come back to the stores for the expansions. In that case, there may be an argument for stores starting to price compete on the core sets. However, maybe they know that they have a fiercely loyal customer base who will spend that $30 extra, and doing so is worth the lost sales, given their margin multiplied by sets sold. It's also a clear way for them to identify who their loyal customers are.

Given all of this, as well as a side conversation that I had with one store manager, I don't get the sense that they expect to sell all that many core sets, but expect to make their money off the expansions. It may also be that their cost for the core set is closer to MSRP than it is for the expansions, because of all the stuff that the core set includes. However, I don't know what their cost for the Core is.

That is fair and sounds about right.

the X-wing DOES need help, mathematically it...oh...this is ANOTHER thread that won't die...sorry.

I tried to buy from my FLGS. I called them three times last week to see if their Armada stuff had come in. When I called on Friday, the owner said he was leaving to go pick up his shipment within the next 30 minutes. So I headed to the shop and waited around for a minute until I saw the owner, who then told me that his distributor had released his order to a different shop for some reason, so he had no ships and didn't know when he would get more. He apologized and asked if I was the guy who had been calling all week. He said it seemed like the expansions might be hard to come by in the area and suspected other shops would be selling out soon. He told me to buy them somewhere else if I could find them. I appreciated his honesty and he clearly understood that I really wanted them ASAP. It was the most guilt free purchase I ever made on Amazon, and I saved a nice chunk of change. Free two day shipping with prime was not too shabby either...

I'll give him another shot when wave two comes out.

Some of you are probably going to say I should have bought them from another local shop, but I don't really go to any other game stores on a regular basis, so I don't feel bad about buying online.

Guys, talking to him won't help get your point across. We already told him everything about 20 times over but he is set in his idea. He can shop anywhere he likes, true, but he has no concept of what happens with small businesses and doesn't want to hear how they work either.

Don't stress yourselves with explaining anything to him. He has made up his mind based on extraneous info and picks and chooses which element of your comment he wants to address. There is no logical debate going on so we can call this thread done because it is becoming an exercise in stobborness.

If that happened to me SmogLord I 2oupd have no issue going on my phone and placing the order right there. The owner was honest and fave you fair expectations.

Beatty, exactly why I stopped responding. He says one thing and ignores everything else

I tried to buy from my FLGS. I called them three times last week to see if their Armada stuff had come in. When I called on Friday, the owner said he was leaving to go pick up his shipment within the next 30 minutes. So I headed to the shop and waited around for a minute until I saw the owner, who then told me that his distributor had released his order to a different shop for some reason, so he had no ships and didn't know when he would get more. He apologized and asked if I was the guy who had been calling all week. He said it seemed like the expansions might be hard to come by in the area and suspected other shops would be selling out soon. He told me to buy them somewhere else if I could find them. I appreciated his honesty and he clearly understood that I really wanted them ASAP. It was the most guilt free purchase I ever made on Amazon, and I saved a nice chunk of change. Free two day shipping with prime was not too shabby either...

I'll give him another shot when wave two comes out.

Some of you are probably going to say I should have bought them from another local shop, but I don't really go to any other game stores on a regular basis, so I don't feel bad about buying online.

It a situation that just happens sometimes, and he totally understood your position and said buy it where you can. Nothing wrong here at all.

I don't know why, but the whole El Paso add sprang to mind.

I will not pay 99.99 for a Starter set when amazon can fetch it for 69.99. that is $30 bucks for crying out load!

And most gaming stores would be fine with you picking up a core set somewhere else, if you buy expansions at the store.Many core sets have little or perhaps even no profit for the publisher of the game. I can't imagine that FFG makes much off an X-Wing core set, at least compared to expansions. Privateer Press has a all-in-one box set that has $200+ worth of stuff in it, for $140.But they're willing to take a hit on a core set because that means you're more likely to buy expansions. LGS' should see that the same way. Better to have someone in the store playing the game, and buying expansions who bought the core set online then not have them as a customer at all.

This is NOT true for all games.

First, Armada is a bit different from most miniatures games. It is going to bring people into the hobby, the cost to support the players isn't that high, the stock isn't going to sit on the shelves. Our owner is a bit peeved about the constricted supply for stores versus what the big online and big box stores were allocated. He still plans to support it though because it's huge.

So, many games have lots of different items or SKUs. Take Warmachine or Flames of War or WH. To stock the games costs lots of money and has big risks. The LGS cannot afford, or at least won't want, to support players buying blisters to add to their online purchased armies. It just doesn't work. All too many stores quit because the players start showing up with new armies bought elsewhere. Of course, the players think they are supporting the store buying something every week, or only ordering online because the store didn't stock the one blister out of two hundred available. The math doesn't work. That $10,000 on the wall has to produce about $3,000 in profit just to break even - every quarter.

The industry needs to figure out how to support the FLGS that supports the players while also keeping up volumes through other channels. Unfortunately, they aren't creative enough.

First, Armada is a bit different from most miniatures games. It is going to bring people into the hobby, the cost to support the players isn't that high, the stock isn't going to sit on the shelves. Our owner is a bit peeved about the constricted supply for stores versus what the big online and big box stores were allocated. He still plans to support it though because it's huge.

So, many games have lots of different items or SKUs. Take Warmachine or Flames of War or WH. To stock the games costs lots of money and has big risks. The LGS cannot afford, or at least won't want, to support players buying blisters to add to their online purchased armies. It just doesn't work. All too many stores quit because the players start showing up with new armies bought elsewhere. Of course, the players think they are supporting the store buying something every week, or only ordering online because the store didn't stock the one blister out of two hundred available. The math doesn't work. That $10,000 on the wall has to produce about $3,000 in profit just to break even - every quarter.

The industry needs to figure out how to support the FLGS that supports the players while also keeping up volumes through other channels. Unfortunately, they aren't creative enough.

Like I said you are right about having more SKU's meaning having a greater risk of not having that ONE item in stock that forces your costumer to look else were, also possibly preventing add on sales you might have gotten. However having all the SKU's means now you are stuck with ones that don't sell and you have to make more sales just to cover that.

So do you have any ideas on how they could be more creative?

I certainly do have more ideas, and have discussed them with some manufacturers (for free which is part of the problem, if I charged the they might listen).

The basic problem is getting the manufacturers to realize what value add the resellers can offer and helping them do it, demanding they do it, and rewarding them for doing it. That's tough to do, but easier than they think.

The advanced problem is identifying resellers who really support the game. It's not easy to do, so you really have to want to do it. Then, you have to know how to legally discriminate between resellers. That's a lot easier than this industry wants to admit. I can't determine if it's ignorance or unwillingness holding up the boat. The last thing is this paradox where no player in the market wants to be the one supporting the FLGS if their competitors can leverage that for more money. OTOH, go looking for a flight school that doesn't have a Cessna on the line. It's good to be your industry's Cessna.

FFG is both mass market and serious gamer niche with their product line. They are truly in a position to do a lot for your FLGS, but they certainly don't want to aggravate the big volume guys. WOTC has done a reasonably good job of getting back to supporting the FLGS. An example of failure would be WizKids from a while back that got to find out what happens when you try pretend you are a FFG, but aren't. (I'll set aside GW cuz that's a whole other Tolstoy novel.

I certainly do have more ideas, and have discussed them with some manufacturers (for free which is part of the problem, if I charged the they might listen).

Is it a question of offering the big-volume corps less of a volume discount?

I can see the problem being that the big corps are going to be much more sensitive to costprice than the FLGSs are. The FLGSs are going to sell as much as they can (not as much) at the cost that FFG sets for them. Being small-time and operating at MSRP, the FLGSs are (cost)price-takers. The big corps, on the other hand, are going to have more weight in the game, and are in a position to negotiate or order more/less based on cost, which influences at how much FFG might want to sell to them.

In that environment, I wonder how much FFG is willing to let go in revenue in order to throw the FLGSs a bone. How much should they?

I do think that FFG has a stake in the survival (and thriving) of the FLGSs, but they know their own business much better than I do. Still, it'd be interesting to know how their strategy works.

I argue about this with myself quite a bit. I usually end up placing the majority of my order online, for dem sweet savings, and then picking up any other stuff I find myself needing at my local store. Example - bought one each of Wave 1 from Miniature Market, then picked up some more fighters and another gladiator from the LGS.

Split ends up being ~70/30 online/store. I'd like to do more to support my store, buuuut I'm cheap, to put it bluntly, and saving 30% or more is hard to pass up.

The issue for online retailers is that they are getting the discounts because they don't have to actually pay for the product until someone orders it. Then FFG ships it for them to the location usually for free or a small fee.

Online stores don't even to touch your purchase. Some do when they rebox it and add their invoice. They can do that from any small back room including their base store.

Add in the fact that they are a store, that means that they have distributors who are making more money off their orders and it becomes hard for FFG to know what goes where

I certainly do have more ideas, and have discussed them with some manufacturers (for free which is part of the problem, if I charged the they might listen).

Is it a question of offering the big-volume corps less of a volume discount?

I can see the problem being that the big corps are going to be much more sensitive to costprice than the FLGSs are. The FLGSs are going to sell as much as they can (not as much) at the cost that FFG sets for them. Being small-time and operating at MSRP, the FLGSs are (cost)price-takers. The big corps, on the other hand, are going to have more weight in the game, and are in a position to negotiate or order more/less based on cost, which influences at how much FFG might want to sell to them.

In that environment, I wonder how much FFG is willing to let go in revenue in order to throw the FLGSs a bone. How much should they?

I do think that FFG has a stake in the survival (and thriving) of the FLGSs, but they know their own business much better than I do. Still, it'd be interesting to know how their strategy works.

Offering the FLGS a bigger discount at lower volume actually can be done, but most people think it can't. You need legal advice as a manufacturer to do this sort of thing, but it's doable. You might have noticed how many online retailers have store fronts. That's often so they can say they are an FLGS to get the same wholesale discounts your stores get. In order to call BS on that, the manufacturer has to put in some real effort and most do not.

Sometimes the effort isn't going to happen because the online guy does add value in his own way. One way is predictable cash flow. Another is market share. Some of those guys have loyal customers who shop their sites like we do our FLGS. It's not a case of FLGS - Good and Online - Bad.

The problem is that a good FLGS adds a lot of value it doesn't get rewarded because online retailers and sometimes the manufacturers themselves ("order from our web store and get this special figure, free shipping over $75!") are luring away customers they wouldn't have without the FLGS having done the work and the selling. (I just don't care about a game I can't play at the FLGS nearly as much as what's played there).This damages the FLGS making them easier pickings. The more folks buy from online because they can't get it at the FLGS, the less the FLGS can afford to stock. Rinse, repeat.

I'm not going to tell people to feel guilty about this. I tell manufacturers to clean it up or watch their business die as the FLGS guys give up. I watched an excellent FLGS with size able mail order business die a death of a thousand cuts. Most of that business did NOT go to the web. Most of it died. Their communities mostly stopped buying those games. One Manufacturer lost a pretty big bit of business.

Here's a video in which an Asmodee/FFG rep explains the new policy:

https://www.youtube.com/watch?v=WEZLeI1Ykng&feature=youtu.be&t=9477

I mean, look, I'll try to avoid making this a 20-page treatise, but if you want to think through this problem completely, you have to understand the entire system, and I think very few people have the combination of knowledge and invested time and effort to do that.

As a starting point, I would suggest you need to understand the following key components in detail if you want to build a working model:

• What are the drivers of long-term engagement with a game?
• What are the distribution outlets available for a game, what are the cost profiles of the various distributors (and therefore the margins that would be needed for each to survive), and what do these distribution outlets contribute to the long-term engagement factor?
• What is the production cost of the game itself and the net margins that a producer can experience?

Each of these is a multi-layered problem, and there are manifold examples of people in the gaming industry who definitely screwed it up (TSR), are in the process of screwing it up (GW), or who definitely did not screw it up and/or fixed it after they did (WotC).

There are also some reality-based constraints on what you are able to achieve with each. For instance, I think one of the under-discussed elements on the distribution (online vs. FLGS and varying levels of discount) is that the FLGS scene varies wildly from place to place. Some communities have multiple, strong FLGS. Some communities don't even have one. Some are deformed in economic profile compared to others due to cost factors that aren't present elsewhere (labor and shipping in Australia, rent in NYC, etc.). This tells you two things: that there's no way to push a uniform outcome to anyone in the gaming space because the abstraction of the distribution channel looks like a Pollack painting that was itself blasted with a shotgun, and that long-term the FLGS space is either not profitable or is ripe for a roll-up / consolidation by a firm that could actually manage the thing appropriately by standardizing and maximizing the scale advantage to reduce costs (and that this firm will not be a captive to a manufacturer, which is the mistake both GW and WotC made with their stores).

So what is really going on here?

1. Most games have network effects. The more people who play, the more people who will play. The more kinds of play that are available (social at home, competitive via tournament, local gaming store leagues, etc.), the more people will play, and more so, those things interact with each other in invisible ways. Tournament vs. casual is a false dilemma, and a mistake many companies have made. The reality is both matter, and the visibility of each interacts with the other in ways that only WotC has really articulated even semi-effectively (with regard to why they support various forms of cards in MTG). Blizzard, weirdly, also expresses this somewhat effectively with how and why they do things with their entire gaming profile in the PC space (I would put money on internal data mining regarding customer engagement and spending driving this), but you have to watch their actions in total, because they don't always say it with words.
2. Distribution offers various degrees of enhancement / dehancement depending on the channel. Crappy FLGS are probably the worst (actively repellent), followed by online distribution (zero value), followed by good FLGS (positive value). It's a real puzzle for a distributor to figure out how to properly channel things to the ones that create the largest long term value.

So in the end, if we are talking about building a net profitable, long-term viable game from a producer perspective, it's a super complicated problem. One thing I can say is that the wrong strategy is allowing online discounting in size. (In fact, weird as this sounds, an inverse scale for discounts - e.g. the more you sell, the more you pay for product, is probably the correct option...)

I think FFG is making a respectable cut at things here, by trying to cut down on online discounting in favor of the good LGS channel. The real issue will be if they can do it effectively while keeping cost of entry low enough that people are engaged. It's a delicate balance.

If you have an FLGS, they are F, and you utilize their establishment for such things as playing games, spending times with friends, staying current on gaming news/products, etc, then you should purchase FLGS as often as possible.

I don't have an FLGS. Last one here closed up over 2 decades ago. It wasn't a matter of local prices vs online obviously, it was a combination of issues. Most of the places only focused on what the store owner was personally interested in, which meant a small niche group of customers. Overall though, its a relatively small community, and the population just isn't big enough to support much around here. That means it's over 2-3 hours to the nearest FLGS, and out of the 2 in that range, they are both pretty focused.

If you have a temporary financial issue (say reduced hours due to illness, or the wife is not working due to being pregnant and on bedrest), and you have to cut down on what and how much you buy...then by all means, go online. But when things stabilize again, return to your FLGS for your purchases.

If you have a long term financial issue, and you want to keep using the FLGS, but you don't want to buy there...keep in mind that by not supporting them financially, you are creating a long term financial issue for them. Maybe you need to cut back on what you are buying and keep the purchases local.

If you don't support your FLGS, you might not have them around for long. If you are utilizing their services/resources for other aspects, then you should, by all means, be financially supporting them.

Opinions will differ based on what you have in your community.

We know that there are people who live out in the hinterland, who are not blessed with FLGSs. They live in a form of exile, destitute of culture, and starving for scraps from Miniature Market's table. You lost forlorn souls, your dismal fate is already sealed. These games are not for you.

Convesely, there are those of us who live in the Shangri-La of gaming, where we have at least 6 establishments worthy of the acronym FLGS, a number of LGSs, and also plenty of comic and book stores where we can buy these products. We swim in so much privilege, that we cannot recognize it.

My guess is that FFG is looking to sell luxury goods to the privileged.