Wednesday, December 2, 2015

We Have Met The Enemy... (Tradecraft)

The game trade is in a massive boom right now, between Magic and board games, so of course, we're prognosticating doom. The usual narrative is that once the trade gets big enough and attracts big box stores, along with a commodification of hobby games on the Internet, there will be a transition to mass marketization, followed by the demise of small stores. The Internet issue is the big one, with a lot of board games selling for close to cost.

On (Cyber) Monday I was buying D&D books on Amazon at cost, to the very penny, the exact price I buy them for from my supplier. Due to an inventory error, I needed them faster than Wizards of the Coast could ship them. That's great if you're a consumer, but as a store owner it has me reading up on coffee roasting, the competitive advantage of small coffee shops. Turning away from the game trade is only natural when it's eating its young. It's too gruesome to watch. But whose to blame? I mean, we like nothing more than to place blame, so who is the culprit in this deepest dasterdliest discount scenario?

It is us. Amazon will always discount to stay price competitive, but their algorithm has a lot to do with their independent sellers. Those independent sellers are none other than our game store owning peers. As game store sellers on Amazon lower their prices, Amazon drops to stay competitive, resulting in the impression that Amazon is the sole bad guy. The reality is the race to the bottom has a lot of participants and the vast majority are game stores.

When we demand the publishers fix this problem, we're really demanding they protect us from ourselves. It's not an entirely unreasonable request, just know the nature of it. Ironically, the counter example that proves this case is Cards Against Humanity. This game has close to zero access to game store owners. There are, I believe, ten authorized sellers.

Without an easy acquisition channel through the game distributors, some of whom, by the way, sell by the pallet to Amazon themselves, there is little to no online price competition with the parent company. Instead, game store owners buy it online and mark it up, leading to the most successful card game, possibly ever, for game stores. It's because of its limited access that it's successful. They've prevented us from fucking it up for ourselves. Once it becomes widely available, CAH will loose the vast majority of its value in the marketplace. Never change Cards Against Humanity.

There is a way to prevent catastrophe and it's a lot like the CAH model. I can't tell publishers how to maintain their brand value, and it turns out it may even be illegal for me to do so, but there are plenty of examples of companies who do this through MAP agreements and similar, legally acceptable, methods for maintaining price controls to preserve value.

I'm confident my store will survive into the future, unless I screw up somehow (we're looking at leases right now, so it could happen). Meanwhile, everyone is looking for their metaphorical coffee roaster, that unique value proposition that will allow them stability in turbulent times.

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