All this talk of fulfillment solutions got me thinking about how ProFantasy and Pelgrane do fulfillment, and how we did it historically.

Ancient History
When we started ProFantasy, we produced every manual and disk by hand. We shipped out in person from the UK all round the world.
We found it very difficult to get representation in the States, and our manuals plus software were heavy and expensive to ship.
We used a company called RPG International - a mail order reseller run by Ryan Dancey, actually, who took 15% and sold and shipped into the States for us.
Eventually they found they couldn't work on a 15% margin, and upped it to 30%.  My this stage (1995, I think) we began selling via the internet, and used a company called Torcom to fulfill for use at a piece rate. This worked out to be more expensive than we'd hoped, and we switched to Wizard's Attic. We were in the enviable position of not being owed money, and managed to get all our product out of the warehouse.

Current Mail Order Fulfillment
Steve Mulhern, a CC2 customer became our mail order fulfillment guy. He works on piece rate basis - an amount per shipment plus an amount per piece. He ships both ProFantasy and Pelgrane stuff. He used to handle distributor sales, but I switched that over the Aldo at Impressions because for ProFantasy it's now a very small slice of our business and for Pelgrane I simply don't have the time or inclination to deal with distributors and collect money from them.

In the UK we carried on shipping non-US orders ourselves for a while, then found a stay-at-home mother who took over until she gave birth, and now we use Table Top Games Ltd, a UK retailer. They charge a lot more.

Details
Our mail order store is a very similar one to the one Vincent and Ron are proposing, and I can tell you some of the pitfalls and pleasures of that model from Pelgrane's point of view.

Pelgrane has a pitifully simple shop page, and we just just a percentage rate for shipping which doesn't usually cover the costs of our generally heavy books. If we had more sophisticated software, we could calculate the actual price of shipping. I'm willing to lose a little on the cover price to make mail order sales; we are competing against retailers who are better set up than us. For those not selling through retail, this isn't an issue, of course. With this, the fulfillment, plus lost and reshipped packages, we lose about 20% of the cover price on mail order.

Steve downloads all outstanding and ships the orders twice a week. He uploads their shipping status.

We pay up front for postage to USPS by credit card. Steve prints his stamps off from the postal service on a label printer, and we pay the costs of envelopes, etc. We also pay for reships.  I communicate regularly with these customers, some of whom opt of of receiving emails.

Steve drives to GenCon with our stuff, helps sell it, and drives back again.

Indie Press Revolution*
In December 2007, I decided I was going to switch my mail order to Indie Press Revolution. The idea was that they could take over the headaches of fulfillment, and leave me to get on with developing games. I assumed that my current mail order customers would switch to IPR. What I found to my surprise was that my direct mail order sales hardly declined at all. Instead, I got a new set of customers. Total IPR costs vary between 18-24%, so these customers were costing me a little more than mail order customers. I decided not to close down the mail order store because of this surprising development. If you are offloading all shipping and fulfillment costs onto your direct mail order customers, you will find IPR more expensive, but they are likely to be an additional source of sales.

I have all the IRP customers details, too, although I've never contacted them - not sure if I'm allowed. I've noticed that IPR customers love talking to publishers, or at least to me - I get a lot of email about Pelgrane games directly from them.

IPR also do some retail fulfillment and they offer better rates to publishers than anyone for this, but they only sell to proactive indie-loving retailers who understand and love those games. This limits their numbers, but the numbers are slowly increasing.

Impressions
I do mainstream distribution of games to hobby stores through Aldo at Impressions. Only the offset printed books give a decent amount of revenue.

OBS
Driverthrurpg.com and rpnow.com provide most of my PDFs sales, again, I think they are an additional source of revenue. I don't like their margins. I have no figures to support this.

My Model
I want as many people as possible to play Pelgrane games, and I'd like those games to be as attractive looking as possible. I doubt I could have printed Trail of Cthulhu quite so nicely if I didn't sell through distribution. I don't think this model is financially the best for me. I suspect that with six months concerted effort I could switch away from a retail model to a mail order one. I'd have more money, but fewer people playing the games. That doesn't work for me. ProFantasy is now almost entirely mail order, through historical accident, I think, and our margins are much better. Put it this way, they pay for a roof over my head.

Summary
You have a wide range of choices, almost none of them exclusive, to distribute your games. Vincent and Ron's new system will offload some of the headaches of fulfillment onto a third party; IPR will take a slightly larger cut and sell your games to extra customers removing more headaaches; OBS will sell far more PDFs than you can on your own, and Key20 or Aldo will get you into mainstream distribution.

Mail Order: It can be quite pleasurable to pack up the books and ship them yourself, but it gets old quickly. I did it for years, so I know.

Mail Order Via Fulfillment: Fufillment labour (if outsourced) and materials, plus any shipping charges you don't pass onto the customer, plus the cost of reships. This applies to the Pelgrane and Vincent's new model.

IPR: 15% of cover, plus some shipping and other charges, optional retail (45% discount) and optional conventional sales. Additional sales.

Key20: not sure what the deal is.

OBS: 30-35% of retail for PDFs. OBS are responsible for 57% of our PDF margins. Additional sales.

Impressions: 18% after distributor discounts.

*I am a minor IPR shareholder.

Update: IPR will allow us to contact our IPR customers, but they can opt out.

This is a really informative post. Thank you!

-Vincent