Friday, August 13, 2010

Pricing Experiment (MTG: Scars of Mirrodin)

The next Magic set, Scars of Mirrodin is released October 1st. As an experiment, and as a celebration of the signing of the Wall Street Reform and Consumer Protection Act, we'll have price tiers for pre-ordering booster boxes.

First, lets be clear on a couple things. A box of Magic boosters contains 36 packs with an MSRP of $3.99 each. That's $143.64 for a full box. I mention this because this is the baseline, a number that many Magic players find alien and unfamiliar. That Magic has become a commodity with a profit margin often approaching zero, is no secret. Therefore, almost every store discounts Magic to some degree, at least those who expect to sell boxes in any quantity. We're not interested in the volume, fly-by-night Internet discount pricing (or our late competitors), but we've learned we need to offer some sort of discount to gain any box sales at all. 

Second, and the point of this experiment, is that the credit card cartels have been squeezing retailers for years with their increasing fees, and when we add their extortionist fees to our sale priced boxes, it hurts us even more. With the passage of the new law, we're able to transparently reflect our fees back to the consumer to some degree in the form of pricing tiers that reflect the cost of various payment methods. I have no intention of extending this very far, but I want to use it to educate our customers that their payment method matters. The difference between using cash versus credit, credit versus debit, and some cards versus other cards is enormous, as we'll show in our experimental pricing.

So here's the deal:

Scars of Mirrodin
Full MSRP:  $143.64

Pre-Order Pricing:
$104.99 American Express / Discover
$99.99  Visa/Mastercard/Debit
$94.99  Cash

Before this law, we were unable to offer tiered pricing based on payment method. Note that some people believe this is bad policy and that retailers will do exactly what I'm doing here. However, notice the cash price. It's the lowest price we've ever sold a box of Magic that wasn't on clearance. The savings in fees allows us to pass it on directly to you, the consumer.
The take away here is that you help us when you use cash to buy things. We will pay more if you don't. There will be advantages if you can help us reduce our costs. Some of these advantages are immediate and tangible, like saving $5 on a box of Magic. Other advantages are less so, like the ability to hire more staff, stock more product, and even stay in business. You have more choices.

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