There *is* a problem: PoD distro into retail

[rpghost]

Oh, I also forgot making contact with the nearly 300 active stores registered with our online store locator.

http://www.rpgindustry.com/storelocator

James

[chadu]

What's the harm in printing up a 100 or so of your books and slipping them into distro to see what happens? Distributers don't order more than a couple of dozen of small press stuff, so there's no danger of needing to print more or of having back stock. Distribution can be an excellent advertising opportunity -- especially since you stand to make money doing it.

My personal problems thus far with doing that have been:
1. Lack of capital funding for the print run (though this has changed in the last month; fingers crossed); and
2. Lack of entry into distributors -- I've been told flat out that the sales numbers of my games -- alternately, the size of my catalog -- are too low to be viable.

Like I've said, I'm looking at the situation more closely, and some cash has been freed up to pursue options.


CU

[chadu]

I'm squinting a little. How did I get cast into the role of the "no store ever ever" guy? I'm the one saying get into the stores, for exactly the reason you're saying, Chad. But I'm also saying, pick and choose which stores, and never mind the ones who aren't going to make good on their side of the deal. Which also includes most distributors.

Fair enough. I didn't mean to cast you in that light.

It's getting frustrating to talk about this, because I personally represented all the independent games, as a principle and unique community, at the GTS in 2001, 2002, and 2003. The reason our games are in some stores, consistently and well, is because I did that. That's how Pandemonium in Cambridge, MA, even knows we exist, Luke. That's how IPR and Key 20 are able to do what they do at all, relative to stores, because I spent three years representing and following up and emailing, as well as participating in the "industry" lists and forums. You guys don't know much about that. I paved that road.

I am aware of that, and I am grateful.

Chad, the more I read over this thread, the more it seems to me as if you didn't really know what IPR and Key 20 are doing. That's not a slam; I'm trying to show you a whole world of opportunity, for direct sales as well as store sales. I think if you follow up on their sites and email them, Brennan and Jason, respectively, will be happy to tell you how their companies work. You can be in the stores, and not at random, either, but with reliable expectations of sales.

I'll admit I'm only vaguely aware of how Key20 and IPR are working; I've done light research, but that was some time ago.

I will check them out soon. Currently, I need to build capital for printing, and I also want to see if T&J gets selected for the "second wave" of RPGNow print distro. While this is slightly akin to keeping my eggs in one basket (well, two: RPGNow and e23), I have a reason: showing solid sales is, strangely, easier via one site than two (which seems crazy to me).

Which may be related to being carried by the "core distros" now that I think about it.

Anywho, I'm taking one step at a time. I change one variable in my business processes, check the response, then continue; I take one opportunity, follow it, see the value or lack, then move on. (Sometimes I then add another variable to look for synergies.) It's just the way I operate. So, I will get around to Key20 and IPR (again), but it'll take time because I am very slow and methodical.

To reinterate: I appreciate what you are saying. I agree with what you're saying. We are not at odds. I'm just looking at distro/retail as more of a marketing "expense" than a sales source. . . and you and Luke are offering data that's making me revise that opinion (again, slowly).

It's all good.

CU

[chadu]

Chad, I bought Dead Inside from a retailer,

Which one, by the way?

Very, very few retailers are/have stocked it, to my knowledge.


CU

[chadu]

OK, I think I'm seeing it. I've already expanded into the retailer zone that you are talking about expanding into. So when I say "no more expansion necessary," that doesn't work for you because you are looking into the zone I'm in, and saying, hey, that could work.

Bingo! I agree.

But expanding past that, way out there, into non-functional retailer zone, is a bad idea. I'm trying to help you see the difference between the two and see how you can step into the zone that works.

I hear you. I'm just wondering if the functional and non-functional zones overlap (in the distros) at all.

This is all new to me, and I'm trying to reconcile hearsay, anecdotes and data from all sides, and perform my own analysis.

Your data, anecdotes, and experiences are greatly appreciated.


CU

[joshua neff]

Chad, I bought Dead Inside from a retailer,

Which one, by the way?

Very, very few retailers are/have stocked it, to my knowledge.


CU

Chad,

James ("rpghost"--which I just realized is "rpg host," although I've always read it as "rpg ghost") carried it in his Milwaukee store. I saw it there, but didn't pick it up. (I rather regret that now.)

[rpghost]

There is a very big chance that the book is still in the back room - RPGMall stock is stored at the store warehouse. If you ask them to look in the RPGMall stock in the back room they'd probably find the copy and be able to sell it to you.

I'll probably be keeping a copy of each of the RPGNow distro releases in the store as well.

James
http://www.rpgnow.com/retailstore.php

[Ron Edwards]

Hi Chad,

I'm just wondering if the functional and non-functional zones overlap (in the distros) at all.

They certainly can. Luke and I, for instance, like to keep our books available through Alliance, ADP, and others ... and in my experience, there's at least one good person at every distributor company who wants to see the games move into stores. In the smaller/regional distributors, usually that one person is the company.

However, policies and practices change at a given distributor pretty fast. Let's not forget that distributors are not gleaming national corporations with wood-paneled conference rooms, secretaries, and water coolers. They look more like an RPG publishing company than most people think: a couple of guys, some warehouse space, a dedicated phone, and not much else. It's not like you have to get certified or anything to start a distribution company. When I visited them, I was startled to see how much their office organization looked more like the family-owned gas station office than what I'd expected, row upon row of carpeted hallways with gleaming linoleum ceilings.

So, let's see, at GenCon 2004, Heather from one of the great retail stores comes up to me and says, "Ron, how come Sorcerer's out of print? We need more copies." Really, I say. According to who? And after a little tracking-down, it turns out that there's some kind of staff shakeup at one of the distributors, and all kinds of weirdness is getting miscommunicated out of there, for lots of companies.

It so happened that distributor had its Madison warehouse right next to the shipping warehouse I was using for a while, before hooking up with Key 20 for store sales. Easy enough - when I did switch over to Key 20, I had the guy in the shipping warehouse go over there and get the Adept Press books from the distributor warehouse directly, and I gave them a check ("buyback," technically). I'd been in the functional zone, and then the boundary shifted on me, rendering those books, in that warehouse, so much unprofitable junk. The scary part is that they already had told people they were out of stock of my books, so if it weren't for that geographic happenstance, I might never have seen those books again.

Fortunately, Chad, with IPR and Key 20 doing what they do, which is a lot like what Sphinx Group did before it focused more on music and comics, and what Tundra originally tried to do before it got strange, it's no longer necessary to saturate the distributors like I had to do just a few short years ago. You can stay a bit more within the functional zone without worrying about the edge shifting on you.

Best,
Ron

[chadu]

I'd been in the functional zone, and then the boundary shifted on me, rendering those books, in that warehouse, so much unprofitable junk. The scary part is that they already had told people they were out of stock of my books, so if it weren't for that geographic happenstance, I might never have seen those books again.

Flaming crap on a crap cracker! That's in-sane.

Fortunately, Chad, with IPR and Key 20 doing what they do, which is a lot like what Sphinx Group did before it focused more on music and comics, and what Tundra originally tried to do before it got strange, it's no longer necessary to saturate the distributors like I had to do just a few short years ago. You can stay a bit more within the functional zone without worrying about the edge shifting on you.

Excellent.

When I'm in a position to start exploring this (guesstimating beginning second quarter 2006), I will definitely drop a note here to get your, Luke, Paul, and everyone else's advice on how to move forward.

Thanks again!

CU

[Polaris]

I'm squinting a little. How did I get cast into the role of the "no store ever ever" guy? I'm the one saying get into the stores, for exactly the reason you're saying, Chad. But I'm also saying, pick and choose which stores, and never mind the ones who aren't going to make good on their side of the deal. Which also includes most distributors.

It's getting frustrating to talk about this, because I personally represented all the independent games, as a principle and unique community, at the GTS in 2001, 2002, and 2003. The reason our games are in some stores, consistently and well, is because I did that. That's how Pandemonium in Cambridge, MA, even knows we exist, Luke. That's how IPR and Key 20 are able to do what they do at all, relative to stores, because I spent three years representing and following up and emailing, as well as participating in the "industry" lists and forums. You guys don't know much about that. I paved that road.

Incidentally, there are actually a couple of good-guy distributors out there. They are smaller, fairly regional, and treated like poor relations by most stores. And since their model of success is "become like Alliance one day," they tend to make decisions that break my heart, as they drive their real success into the ground, rather than help themselves or me. But I do want to acknowledge them a little.

Chad, the more I read over this thread, the more it seems to me as if you didn't really know what IPR and Key 20 are doing. That's not a slam; I'm trying to show you a whole world of opportunity, for direct sales as well as store sales. I think if you follow up on their sites and email them, Brennan and Jason, respectively, will be happy to tell you how their companies work. You can be in the stores, and not at random, either, but with reliable expectations of sales.

Best,
Ron

Ron,

Please pardon my ignorance here... but are you saying that Key 20 actively sells to retailers (bypassing the distributors)?  I was under the impression that they did not do that.

William

[Ron Edwards]

Hello,

You'll have to get the lowdown from Jason Valore for the official statement, but what's relevant to me is that they do not simply plead or blanket-promote to distributors - they negotiate, they stay on them, they follow up on re-ordering, and they give me the straight dope about who's buying. Key 20 has its head in the right place regarding who's the client - me.

There are some differences between IPR and Key 20 in how they deal with retailers, but again, I don't want to speak for the companies. If you contact each of them, they'll give you straight answers.

Also, in the interests of disclosure, I'm perhaps unique in using both companies, through a historical accident. IPR handles my direct on-line sales; Key 20 handles my retail orders. So I can say pretty firmly that both do an excellent job.

Best,
Ron

[Sydney Freedberg]

I know this is a tangent, but I can't help myself:

They order what their weird little rumor-community considers hot at the moment, plus slush-piles with a little extra cash once in a while, and do not re-order specific titles from those slush-piles based on sales. This is not hearsay or speculation on my part. These guys brag about this.

Wait. A. Second. "Do not re-order specific titles...based on sales" equates to "do not allow market forces to affect business decisions." That's insane.

Or let's call it "ouija-board capitalism." Do people whose own money (owner's investment or employee's salary, either way) is at stake actually operate like this? If so, how long (rounded to the nearest week) do they tend to stay in business?

Like a old-time D&D character about to be crushed by an avalanche, I want to yell out "Disbelieve! It's an illusion! I disbelieve!"

[Ron Edwards]

Hi Sydney,

Based on absolutely direct experience, and absolutely clear information and observation, many retailers do indeed operate just like that.

And they don't immediately go out of business, although many of them do, like clockwork. Why do some persist?

1. Many stores do not rely on RPGs as their primary product. Many of them conduct an ongoing boardgame business, an ongoing "hobby gear" business (Matrix fans, Star Wars fans, etc), and especially during the last 10 years, an ongoing CCG business aimed at 9-12 year olds.

2. Many store-owners are dealing with a constant critical-debt problem. In those circumstances, making the nut this month takes top priority. The best way to do that is to hype up, say, the next big thing from TSR (so-called) or WoD, depending on the store's customers, and make sure they buy up whatever gets ordered big that month. To do this, the store owner cultivates a whole community of mid-teen to mid-twenties customers as a kind of personal cult. He becomes their Insider Gamer Oracle; this is, in fact, a primary skill among many hobby store owners, of many kinds.

By contrast, at that level of crisis and debt, something like Sorcerer is totally trivial. It yields a whole $8 profit per core book, and core books sell, even at the stores where it's most popular, perhaps once or twice a month. It's just not a bulk buy. To this sort of retailer, the goal of ordering the game at all is to militate against the illusion that he's enslaved to whatever TSR and WotC pump at him (whoops, forgot Warhammer miniatures - them too). A few little weirdo games up on the shelves provides the "see, I carry everything" message. If one or two of them sell, fine; if not, fine. He just orders up a couple-three of them with every ordering cycle to keep that shelf stocked.

Bear in mind that I have seen such stores, even ones which boast of being the top store in their states, go under, much to the customers' consternation. Wasn't that the best store, with the best guy? What happened? Also bear in mind that the stores which persist are often subsidized through an external business or personal inheritance - basically a big expensive place for the loser husband to hang out with his "business" while the wife's real-estate business or whatever really provides the living wage for the couple. Sound harsh? It's not speculation. I know the guy who fits this description and I know his store well.

So yeah, ouija-board capitalism. Totally. My observations at the GAMA Trade Show are perfectly described by that term.

Best,
Ron

[Sydney Freedberg]

Oh.

Still disfunctional, but now at least comprehensible. This might also explain why my local comic book store has changed ownership about three times in the last six years. (I don't think I've ever even heard of a game store in D.C.).

[LloydBrown]

1. Many stores do not rely on RPGs as their primary product. Many of them conduct an ongoing boardgame business, an ongoing "hobby gear" business (Matrix fans, Star Wars fans, etc), and especially during the last 10 years, an ongoing CCG business aimed at 9-12 year old

While specific stores vary (I can think of three, one of which closed last year), board games don't pay the bills.  Stores stock them because the average customer recognizes them, so it's a kind of transitional product.  They sell better at Christmas.

For most stores, miniatures games and CCGs pay the bills, and the market for CCGs tends to be teens and early twenties. 

2. Many store-owners are dealing with a constant critical-debt problem. In those circumstances, making the nut this month takes top priority. The best way to do that is to hype up, say, the next big thing from TSR (so-called) or WoD, depending on the store's customers, and make sure they buy up whatever gets ordered big that month.

Cash flow is a concern for all businesses (which is what you're describing and not debt).  You have to pay the bills if you're a business.  And absolutely, the smaller stores do not have excess cash flow with which to experiment with Indie products.  The mature stores, the ones that are making that nut every month, are looking for a product to give them a competitive edge.  Those stores are the ones most receptive to product solicitations they receive from outside distribution.

By contrast, at that level of crisis and debt, something like Sorcerer is totally trivial. It yields a whole $8 profit per core book, and core books sell, even at the stores where it's most popular, perhaps once or twice a month. It's just not a bulk buy. To this sort of retailer, the goal of ordering the game at all is to militate against the illusion that he's enslaved to whatever TSR and WotC pump at him (whoops, forgot Warhammer miniatures - them too). A few little weirdo games up on the shelves provides the "see, I carry everything" message. If one or two of them sell, fine; if not, fine. He just orders up a couple-three of them with every ordering cycle to keep that shelf stocked.

Bear in mind that I have seen such stores, even ones which boast of being the top store in their states, go under, much to the customers' consternation. Wasn't that the best store, with the best guy? What happened?

Competition?  Death in the family? Inventory creep on the GW wall destroyed his positive cash flow?  Went into another industry?  Without seeing the financials for a year or two, we'll never know.  I've seen a lot of stores go out of business, though, and not one of those owners claimed that he wished he'd invested heavier into indie RPGs. 

In all actuality, answer #3 is probably the biggest killer of game stores.  Marcus King, owner of Titan Games, buys 30-50 closed shops a year.  He tracks certain factors, and nearly all of these closed stores carried a heavy inventory of GW.  Managed properly, and kept above a certain volume, it can make money.  Managed poorly or moved slowly, it can crush you.  I won't go further into that in this thread, though.