Friday, December 18, 2015

Fixing A Devalued Market (Tradecraft)

I have written much lately about the despair of attempting to sell games in a market where my peers are dumping product online at cost. It was pressuring me to move away from the game trade, to consider investing in things like coffee shops and survival gear stores rather than in the trade I've spent 11 years learning and to some degree, mastering. So it was a Christmas gift of sorts to see the Asmodee Group announce a new retailer program that prohibits sale of their games online.

Asmodee Group, as I've talked about in this blog, is the big player now, comprised of Asmodee, Days of Wonder and Fantasy Flight Games. In my store, that's 36% of all the board and card games I sell. A mature market usually has an unassailable player of over 50% market share. Asmodee is on their way. I wrote about this last May.

Why do this? I'll let Christian Petersen, the new CEO of Asmodee USA explain it from this recent ICV2 post:
“The marketplace has long been distorted by providing one-size-fits-all sales terms to every retail account, regardless of its channel of sale,” he said. “The growth in demand for games over the last decade, in our view, has been fueled not only by fantastic product, but by the support of specialty retailers who incubate personal connections between players, facilitate tournaments and leagues, provide instant product availability, and increasingly provide a ‘third place’ that is instrumental for so many gamers to enjoy and discover our products. The retailer cost of providing such channel services is significant, and so we’re now making policy changes to ensure that the sales terms provided to those retailers, relative to other channels, are positively reflective of the value they add to our distribution chain.”
He gets it. Christian Petersen has decided pure volume of sales, at any price, is not as valuable as thousands of retailers growing their market by building relationships with customers.

This will not end all online sales, but it doesn't have to. What it does is prevent dumping. It ensures that retailers will not speculate, will not over order, will not crap all over the marketplace because they lack the skills to budget, purchase and sell properly. Some retailers won't be happy, because this is their standard business practice. I wanted to come up with a nuanced response to them, so here it goes.
"Fuck you guys."  -- Gary Ray, Black Diamond Games
You may quote me on this. I'm not going to win friends or board elections, but if you're one of these guys, you are the problem. The reason Amazon sells this stuff at near cost is because you, the dumper, have driven the price to the bottom. I wrote about this a couple weeks ago in a post entitled We Have Met The Enemy. With any luck, other companies will follow the Asmodee Group example.

What will the consumer get out of this? Well, if you're just a get the thing at any price consumer, prices will return to normal, or more likely no more than 10-20% off MSRP as we discover the chinks in the Asmodee armor. On the plus side, I'm suddenly much more keen on running X-Wing and other events AND recommending such products when Asmodee Group games are not sold at cost online.

There is a lot to this. It won't go into effect until April, so I expect a lot of dumping before that. It allows for retailers to apply for exemptions to sell online for various reasons, which might undermine this. It ends the exclusive for Days of Wonder with Alliance and it specifies that only five distributors will get access to Asmodee Group products, all large ones we have accounts with. I see this as a victory for brick and mortar stores that do brick and mortar activities and support the community rather than the mercenary activities of faceless online commerce. Now we begin strategizing how to step up our game in supporting Asmodee.

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