One of the Fantasy Flight Games guys was comparing their company, with a reduced discount to retailers, to Games Workshop, which has a similar reduced discount. The industry argument is this: You can reduce your discount to retailers, if you provide additional support that gives the appearance that retailers are paying extra for this added value. However, Fantasy Flight is no Games Workshop, let me tell you. You can say a lot of bad things about Games Workshop, but their support is unparalleled and probably is worth the extra lost margin:
Availability: Over the last year, I've had two items from GW unavailable, and only for a week or so, whereas FFG products are gone for very long stretches, months at a time. I can't do turn rate analysis on MANY Fantasy Flight products, because as my distributor points out, I haven't SEEN that game in months. Now when they come back in stock, I seriously question whether anyone missed it or not before re-ordering.
Discount vs. Product Support: Those who reduce their discount to offer special support tend to eliminate that support over time. It's a suspect argument. GW, however, does offer free samples, a phenomenal damaged item or parts replacement policy, a monthly magazine to support their games, and generally stellar support.
Stock Swap: I can swap out dead GW inventory, whereas I have to put dead FFG games, which are NOT all evergreen, on clearance.
Internet Sales: There is some holding the line on Internet sales of new GW product, whereas FFG sells directly from their website, often times with distributors appearing to be shorted new product so it can be held back for this purpose. The same argument holds for convention sales.
Price Increases: When was the last time the GW discount changed? Yes, they raise prices annually, but I don't lose sleep over shrinking margins. If FFG is that solid and integral to the game industry, they can afford to raise prices rather than reduce discounts.
Street Dates: Hey, where are the street dates FFG? Like clockwork, GW customers come in to buy a new item on the street date. I can put up colorful flyers that GW supplies me, with dates printed on them. They don't always keep their street dates, but they try. My hardcore FFG customers are educated that they'll get their game whenever FFG feels like shipping them. Where is the Mutant Chronicles game?
My Promotion: Unless I get a FFG demo for free, and I rarely do, I have more incentive to promote a game from another board game company because of the discount. Why promote a game with a slimmer margin, especially an American style game that takes hours to play?
Rackham: I'm sure you don't want me to rant about them in this thread, but they tied their wagon to your horses. The discount on Rackham is either unworkable or unsustainable, depending on which distributor you're using.
Disclaimer: I sell a LOT of FFG games, and it's a top 3 board game company for me. Kingdom Hearts is picking up. I love Citadels. I sell a ton of big box $80 games. Market share in this industry doesn't mean a lot to me: A tiny percent of tiny, equals tiny.