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RexHavoc

GW announce price rise for paints and Start collecting sets

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3 minutes ago, HammerOfSigmar said:

Well, one of my friend working in plastic toys factory told me that the cost to make the models after you have the mould(which is very very expensive) is really really cheap, something like less than 5% of the starter kit's current price. Hence, I am curious, under such circustance, shouldn't gw lower their price to sell more product to make more profit?

In an ideal world, but I expect people would hold off from buying new stuff then in anticipation of it dropping in price in the future.

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Posted (edited)
8 minutes ago, HammerOfSigmar said:

Well, one of my friend working in plastic toys factory told me that the cost to make the models after you have the mould(which is very very expensive) is really really cheap, something like less than 5% of the starter kit's current price. Hence, I am curious, under such circustance, shouldn't gw lower their price to sell more product to make more profit?

The material cost is cheap but that's a very simplistic view.

First up the moulds that GW uses run into the hundreds of thousands of pounds to buy. This is why plastic is often only used by bigger companies, because the up front cost for an industry standard mass production mould is exceptionally high. Resins and metals have much cheaper mould options which is why, despite materials like metal being more expensive than plastic, its favoured by start up companies because the mould cost isn't as crippling. 

Secondly the cost of producing a model is more than its material cost. You've got:

  • Concept artists who design the paper version of the model
  • 3D modellers who make the model
  • Parting expert who designs the mould and parting lines and such
  • Mould production costs and staff
  • Production and packing staff costs themselves
  • Packaging material
  • Photographers for marketing material production
  • Costs of power, lighting, land rent, business rates, additional staff (eg cleaning, management, reception etc...)
  • Rules staff 
  • Customer service staff and phone lines. 
  • Writing staff for lore and other background information
  • Website and website promotion staff
  • Store staff for GW stores around the world. 
  • taxes

And likely a few other dozen things that I've forgotten/am unaware of. So whilst yes the material cost of a model is almost nothing, the actual amount of stuff and staff that it has to support is very extensive. Furthermore remember that most of the above is done in the UK. GW don't outsource their production to India, China or other similar countries where the labour costs would be dramatically lower (as might taxes and other elements). 

 

 

With a lot of smaller companies many of the above roles can be combined into multi-role positions. However there are limits with that; staff who multitask might not be as skilled at all tasks; they might have tighter limits on how much can be produced in total and within a given time frame which might curb the companies ability to expand its range and expand to meet its customers demands. Limited staff also leaves a company more at risk of failure when one or two staff are removed  - companies have fallen when the boss gets ill and suddenly half the office and production and design roles are lost in one go with no chance to replace or swamp in someone from another area of the company. 

 

Edited by Overread
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1. Glad they told us.

2. Not happy that an expensive hobby on a give/get ratio is becoming more so. But this is compared to guns and cars as a hobby 

3. The rest of the world already pays more than the UK on every item. If they correct this in the meantime, sounds great.

4. Most of the SC Boxes are great savings. So if that trend stands, fine by me.

On 1/5/2019 at 3:11 AM, Sleboda said:

Namarti Thralls: 10/$50

Arkanauts: 10/$45

Blood Warriors: 10/$62

Harridans: 10/$45

Chainrasps: 10/$40

5. If these were a little cheaper, considering a few of these I'd take in amounts greater than 10, I'd probably buy more.

6. I stopped buying everything but SC boxes and Starter/Two Player Boxes a long time ago because of the value saved. I may be a year behind on collecting, but I can buy more.

7. We need more SC boxes. I would probably buy into a new army if it came with a SC box on release.

 

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2 hours ago, Fairbanks said:

 

7. We need more SC boxes. I would probably buy into a new army if it came with a SC box on release.

 

Totally agree with this. Should be amongst the first items released. In fact, I’ve long been an advocate of the “start collecting boxes should include an army book” school of thought as a real starter/gift pack

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1 hour ago, Fairbanks said:

7. We need more SC boxes. I would probably buy into a new army if it came with a SC box on release

Can't agree more, that's why I have stopped letting myself being  hyped for new releases, plus by the time gw release a  SC/battleforce, the errata and ghb would be out already. 

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42 minutes ago, Sigmarusvult said:

Can't agree more, that's why I have stopped letting myself being  hyped for new releases, plus by the time gw release a  SC/battleforce, the errata and ghb would be out already. 

I saw a sharp decrease in my model buying frenzy when I understood that those new models we're super excited about are here to stay. They'll still be around in 5, maybe 10 years. Maybe more. There's no hurry, keep calm and put down your wallet.

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23 minutes ago, Minis by Night said:

I saw a sharp decrease in my model buying frenzy when I understood that those new models we're super excited about are here to stay. They'll still be around in 5, maybe 10 years. Maybe more. There's no hurry, keep calm and put down your wallet.

Yep, take a pause and you often find you don’t really have to get it RIGHT NOW :)

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In GW's financial reports they talk about their pricing model as seeking an average price increase on products sold of 3% a year.  With new releases making near a third of their sales (also outlined in their financial reports) they can increase prices of new kits by 9% compared to the last comparable kit and then round up and they'll average their 3% a year. 

If their paints and start collecting boxes are getting a price increase it means they are selling better than they thought compared to new releases.  That the sales of these items is causing their price increase on new releases to not make the average price of products sold not hit that 3% target.  So they probably did the math and figured out what needs to change to hit their stated goal.

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5 hours ago, Overread said:
  • Writing staff for lore and other background information

 

This is one of the most important ones. There's a tonne of lore that sets a nice picture of the realms and that doesn't come together over night. 

Without the lore to back everything up, our minis are just pieces of plastic that we paint. There are significantly cheaper alternatives without the lore but they're just models. 

The reason why we pay as much as we do for these minis is because of the lore. Lore that has to be constantly developed to keep the narrative going. Further still, compared to other games I've played, GW games are extremely well developed rules wise. A lot of time would go into testing all of this stuff. 

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Aye its amazing but the lore does sell GW games and also keeps people interested. Even if the only lore they read up on is that which comes in the codex. Some might get annoyed that a codex come with "fluff I already sort of know" but its invaluable at building the whole experience. I think a lotof other games fall down there because they don't back up their game with even a basic lore or setting and that means there's less to spark inspiration in people.

Less to inspire and less to chat about, its a bit like a film. Ever notice that after a film if it was one that tied up all the loose ends chances are you go "hey that was good/bad" and that's about it. Whilst if its a film that presents a question or resolves only part of its core story etc... then right after there's loads of chatter about "Oh well I think it was..." etc... GW's lore presents that ground and unifies the players as they can read the same lore, yet most will only read the lore in their own codex so there is also loads of lore swapping over etc... 

 

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On 1/7/2019 at 1:52 AM, Minis by Night said:

They don't actually, not with GW. I heard that they have some sort of internal rule where they can't, ever, change the price of a box, unless they rebox the kit. That's part of the reason why some kits have price that are totally insane (like the Blood Knights), why old kits price never drop, and why they never have a sale. A price hike for GW, although not pleasant for sure, might indicate that they have finally decide to do away with that (kinda bizarre) rule, and they might now have a bit more freedom when it comes to pricing. It might not be all bad.

As @Sleboda says the rule is that once set, prices won't come down.  I was told that there is a pricing structure in place based on the box size and number of sprues it contains, but would imagine this fluctuates and varies a little - it's also a fairly new structure, so old things (Varanguard being the best example) are super expensive in comparison to newer releases.

19 hours ago, HammerOfSigmar said:

Well, one of my friend working in plastic toys factory told me that the cost to make the models after you have the mould(which is very very expensive) is really really cheap, something like less than 5% of the starter kit's current price. Hence, I am curious, under such circustance, shouldn't gw lower their price to sell more product to make more profit?

Angry customers is probably the best example.  I'd be really miffed if I spent £30 on a box of models only for it to be reduced to £25 a week later.  Personally I'm really curious to know what time period GW has for their return on investment.  As @Overread lists, there's a whole host of overhead that GW have - don't forget WHCom and WHTV bring in very little income (Twitch is the only one realistically) so will be included as part of the cost we pay.

13 hours ago, Mosquito onthe TenthFloor said:

Yep, take a pause and you often find you don’t really have to get it RIGHT NOW :)

I do not understand this?  It's almost as if you're implying the box of new models are going to be available next week 😮🤣

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Actually I think angry customers is the least of GW's issue - most people get miffed with price reductions, but most accept that they do happen in the real world. Plus most get over it pretty fast. The greater issue is likely that GW holds a lot of stock with distribution companies and 3rd parties where profit margins are small. So chances are GW would have to issue refunds to those distribution networks or run the stock all the way to 0 before lowering the price since otherwise those stockists could have bought stock at a loss with a price reduction. 

Another aspect might be that by not lowering prices they don't run the risk of creating an atmosphere where customers start pausing on buying as they "wait for a price drop" that might never happen on some products. Because each product they sell is long term (heck original space marines are a 20 or 30 year lifespan product - that's a BIG chunk of time in modern production) they can't afford to build a generation or more of gamers who expect and wait for price drops. You can see what happens with computer games and this - there are a wide number who will never buy games at launch and will wait for sales - but worse they will be very vocal about it. This can create a sense of devaluing a product in the eyes of the customers which drives more price complaints. 

By having a hard "no reductions" policy, GW does still get price complaints, but there is no expectation of lowering which I think helps keeps their sales going at a steady rate. Those who simply won't buy without reduction are not customers GW is trying to entice into their game; or at least not through lowering prices  as skirmish and killsteam are clearly products aimed at reaching out to that "its expensive to get started" market. 

 

I do think that this policy has issues, mostly with regard to AoS because GW has made armies up out of some former elite unit choices which were priced as elite choices not as core troops. It's a legacy issue and another one of those problems that AoS has to live with due to its choppy and odd start in life. It really should spark GW for making a one-time exception to their general rule and honestly they should have addressed it long before now. Either by dropping the prices en mass on a selection of products or by reboxing as they launched armies. Daughters of Khaine players should not be paying £35 per box of 10 warriors for their main troops. GW should have a SC kit or a new "20 daughters" box released or similar. Granted they have partly covered this with their new Battleforce set (which is fantastic), though its a medium term product (ergo its not a long term product and it will run out of stock at some point).

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Everyone is ranting a lot about princing of stuff here so I just wanted to say I'm really happy the new Mangler Squig is only 65€ and the Throggboss only 55€

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17 hours ago, Mosquito onthe TenthFloor said:

Totally agree with this. Should be amongst the first items released. In fact, I’ve long been an advocate of the “start collecting boxes should include an army book” school of thought as a real starter/gift pack

That's a terrible business decision.   They can sell at higher prices to people who don't want to wait.  People who want to pay lower prices wait a ~ year for the battleforce / SC box.  This is a publicly traded  for profit corporation... 

 

12 minutes ago, Eevika said:

Everyone is ranting a lot about princing of stuff here so I just wanted to say I'm really happy the new Mangler Squig is only 65€ and the Throggboss only 55€

These models are probably smaller than you think.  Smaller than all other recent centerpiece models (GUO, Morathi, Leviathan, black coach, aventis).  I think they are on 70-80mm bases. 

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Just now, sorokyl said:

These models are probably smaller than you think.  Smaller than all other recent centerpiece models (GUO, Morathi, Leviathan, black coach, aventis).  I think they are on 70-80mm bases. 

I know the size of them and I'm still glad the price is reasonable

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40 minutes ago, Eevika said:

I know the size of them and I'm still glad the price is reasonable

I guess reasonable is a moving target. The new squig here is 3 small sprues for $45. Usually you would get at least 2 medium sprues for that.   I bet these "big" kits  are 1 large sprue , maybe an extra medium but would be a bit surprised.    Compared to say, Chainrasp horde , sure this is reasonable, but compared to older kits where you have a 3-4 stack of sprues filling the box, you aren't getting as much as you used to.   Some of it is advances in the model slicing (less bits needed) and  bit placement on the sprue (more per sprue) but you have to admit it will feels a little underwhelming if these come in the big boxes and then just have 1 sprue. 

Edited by sorokyl

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GW's refusal to ever put stuff on sale has always seemed odd to me. I remember just before AoS came out, I was wanting to grab the last few 8th ed army books for my collection and asked the shop keeper whether they would be reduced to clear once the new edition came out. He said that they would stay the same price right up until the end, and then be thrown in the skip if they hadn't sold. The justification for this was that "existing customers would object if people could suddenly get something cheaper than they did", which is a load of rubbish. Most things change prices over their shelf life, and I've never once met someone who said "How dare you have got that book in the 3 for 2 at waterstones when I paid full price for it on release day!" its just not how things work. I guess its an excuse though!

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12 minutes ago, EccentricCircle said:

GW's refusal to ever put stuff on sale has always seemed odd to me. I remember just before AoS came out, I was wanting to grab the last few 8th ed army books for my collection and asked the shop keeper whether they would be reduced to clear once the new edition came out. He said that they would stay the same price right up until the end, and then be thrown in the skip if they hadn't sold. The justification for this was that "existing customers would object if people could suddenly get something cheaper than they did", which is a load of rubbish. Most things change prices over their shelf life, and I've never once met someone who said "How dare you have got that book in the 3 for 2 at waterstones when I paid full price for it on release day!" its just not how things work. I guess its an excuse though!

Honestly I think the lack of sale prices is due to shelf life.  If they had a 20% off holiday sale,  people would buy a ton and sell them for 10% off on ebay in a few months.  

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Just now, chord said:

Honestly I think the lack of sale prices is due to shelf life.  If they had a 20% off holiday sale,  people would buy a ton and sell them for 10% off on ebay in a few months.  

True, it seemed particularly disingenuous in that case though, since they were about the scrap the product. I'd think that if they are phasing something out then saying "hey this is last chance to buy, get it now for 10% off" or whatever, would be a solid way to clear their stock. Around the same time a GW person also told me that they hadn't sold any Tomb Kings stock for months, and then had a run on them the moment they were discontinued.

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Just now, EccentricCircle said:

True, it seemed particularly disingenuous in that case though, since they were about the scrap the product. I'd think that if they are phasing something out then saying "hey this is last chance to buy, get it now for 10% off" or whatever, would be a solid way to clear their stock. Around the same time a GW person also told me that they hadn't sold any Tomb Kings stock for months, and then had a run on them the moment they were discontinued.

Agreed.  If they are removing it from inventory they should sell it.  (The realmgate campaign books come to mind).  The amount of energy, material etc being wasted is bad.

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48 minutes ago, chord said:

Honestly I think the lack of sale prices is due to shelf life.  If they had a 20% off holiday sale,  people would buy a ton and sell them for 10% off on ebay in a few months.  

that's not how ebay works.

In the USA, ebay is already 15% cheaper than the GW store.  If the GW store had a 20% holiday sale, and you bought something to sell on ebay, you'd have a bad time.  You pay 10% fee to ebay, ~3% fee to paypal, and ~10% the cost of the product to ship it (for most boxes this is pretty accurate, but obviously it varies)

So you bought the product for 80% of retail and flipped it for ~ 65% of retail. congrats. You went through a lot of hassle to lose some money. 

Some sales now and then would not kill them! Esp to get old product out of the way. 

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50 minutes ago, chord said:

Honestly I think the lack of sale prices is due to shelf life.  If they had a 20% off holiday sale,  people would buy a ton and sell them for 10% off on ebay in a few months.  

Exept this is not the case, because a lot of internet retailers have a 25% discount on all GW products.

The main "excuse" GW has for not have any discount is because it would hurt the third party stores that don't do them.

Yes, this is a weak a*s excuse.

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5 hours ago, Overread said:

I do think that this policy has issues, mostly with regard to AoS because GW has made armies up out of some former elite unit choices which were priced as elite choices not as core troops. It's a legacy issue and another one of those problems that AoS has to live with due to its choppy and odd start in life. It really should spark GW for making a one-time exception to their general rule and honestly they should have addressed it long before now. Either by dropping the prices en mass on a selection of products or by reboxing as they launched armies. Daughters of Khaine players should not be paying £35 per box of 10 warriors for their main troops. GW should have a SC kit or a new "20 daughters" box released or similar. Granted they have partly covered this with their new Battleforce set (which is fantastic), though its a medium term product (ergo its not a long term product and it will run out of stock at some point).

Totally agree with this. Really, there is no reason they couldn't have either repriced the boxes or upped the model count in them when repackaging and reissuing for the DOK release.

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Posted (edited)

Been a few years since I studied economics (just look at my various bank accounts for evidence) but I can make a fairly decent stab at why selling old product cheaply to get it out of the way probably isn't a huge concern for them at all (at least with the models, books maybe a slightly different matter).

As has been pointed out the actual cost of manufacturing the models is just a tiny part of the overall cost to GW alongside designing, developing, marketing, stocking and selling a range. Nearly all those other costs are upfront though so when a new range appears it has a large minus figure against it that it needs to recoup, and most of that will be done whilst it's the hot new thing.

By the time it's retired (which in some cases might be decades plus after release) that range should have long recouped all its costs, had a good few years of chugging along selling ok but now is probably not just taking up store shelf/warehouse space but it might be holding back the evolution of the game.

Now because those old ranges have long recouped their upfront costs if they just bin several skip loads of models the actual loss to GW is pretty much negligible. Whereas counterintuitively reducing them just clear the range could potentially cost GW as, hobby whales aside, most of us have a limited budget for this nonsense, and despite the way a lot of us act (myself included) models aren't perishable goods.

So if GW reduced, let's say, Freeguild to clear I might happily blow my hobby budget to buy them all up cheap and then spend the next few years painting and playing with them instead of buying the new thing that currently has that very large negative number against it in the balance sheet and needs to shift whilst it's getting all the attention.

 

 

 

 

 

 

Edited by JPjr
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Posted (edited)
3 hours ago, sorokyl said:

 

that's not how ebay works.

In the USA, ebay is already 15% cheaper than the GW store.  If the GW store had a 20% holiday sale, and you bought something to sell on ebay, you'd have a bad time.  You pay 10% fee to ebay, ~3% fee to paypal, and ~10% the cost of the product to ship it (for most boxes this is pretty accurate, but obviously it varies)

So you bought the product for 80% of retail and flipped it for ~ 65% of retail. congrats. You went through a lot of hassle to lose some money. 

Some sales now and then would not kill them! Esp to get old product out of the way. 

 thanks for giving us a detailed breakdown on how ebay works. 🙄

Edited by chord
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