|Billy has the answer! Call now!|
So I woke up this morning and saw on BOLS that GW has responded to the mass emails, rants and trolling that the fan base and companies have been spamming them with. The letter follows below:
Thanks for contacting Games Workshop about the change in our trading terms for European accounts. I know this has frustrated you and for that I am truly sorry. As a long standing customer, you deserve to know why we made this decision.
As you know, we introduce people to the Games Workshop hobby of collecting, painting and gaming with Citadel miniatures through our Hobby Centres and local independent trade accounts. Games Workshop Hobby Centres run introductory games and painting sessions, beginner lessons, hobby activities and events. We provide all these services free of charge. We only recover this investment if customers then buy products from us.
Where we don't have a Games Workshop Hobby Centre, we support local independent trade accounts. These businesses provide a convenient place for customers to buy our products close to where they live. We support these businesses with local customer service teams and warehouses to ensure customers have immediate access to our best selling products and new releases. Many customers discover the hobby this way.
In addition we invest millions of pounds every year in our design studio and factory to ensure that each month we release more new products. This makes the Games Workshop Hobby more exciting for existing customers, helping them stay in the hobby longer. We can only afford to do this because of the volume of customers we have recruited and developed through our local Hobby Centres and trade accounts.
It is for this reason that we have changed our European Trade terms. Over recent years, a number of currencies have moved a long way from their historical relative values, and this has opened the door for some traders to try to take advantage of these currency movements and offer deep discounts to overseas hobbyists. This has been the case with European internet traders selling to some of our customers overseas.
While this may seem great in the short term, the simple fact is that European internet traders will not invest any money in growing the hobby in your country. Their model is to minimise their costs and free-ride on the investment of Games Workshop and local independent shops in creating a customer base.
We on the other hand have to keep paying our Australian staff, rents and utilities in Australian dollars. While some customers have suggested we halve our prices, the only way we could do that is if we halve our Australian staff's salaries, default on our rents and not pay our suppliers until exchange rates move back into alignment. That's the reality of what a price reduction of this scale means. And we both know that customers who are motivated by price are not going to change their behaviour if it was any less than that.
The inevitable consequence if this was allowed to continue is that Games Workshop would not be able to operate Hobby Centres, nor to support local trade accounts. And if this happened in more territories outside Europe, the loss of volume would leave Games Workshop no choice but to scale back our investment in new product development, further eroding our customer base. Not something that we or our customers would want us to do.
That is why we took the decision to take legitimate action to restrict European trade accounts from selling the goods they purchase from Games Workshop outside Europe. None of the other alternatives were viable.
While I understand that you may still be unhappy with our decision, it was taken to ensure we can continue to support the Games Workshop hobby communities around the world through our Games Workshop Hobby Centres and local trade accounts. And to ensure we continue to invest in developing the best possible new product releases every month. I hope therefore that over time you will see the benefits of this decision for you and your hobby.
18 May 2011
So there you have it. A response. Something I don't generally see from them. First let me say, good on them for actually responding and not looking more like a huge soulless company. Now lets get onto the juicy bits. In his letter, Mr. Wells responds with distinct and valid arguments. He goes into length on how the exchange rates have caused them to raise prices. Mr. Wells also goes into detail about how they spend all of this time trying to garner new players with painting clinics, gaming advice and how they even support the hobby by giving prize support to tourneys.
That all sounds fair and good. I'll give them the fact that exchange rates can cause profits to take a nose dive, but that's not the real reason according to them. The real reason is online companies that can offer GW product at a lower price, which in turn garners GW less profit. So what can they do to change this issue. What they are doing is basically bullying the interwebs with the same tactics they used a few years ago. This causes a huge issue. In the earlier part of the century GW made things so companies could not show the models and you would have to "call" to order, and also limited brick and mortar stores in how they sold GW product online. This actually is counter productive. What happens is you have less companies that sell GW product, which in the short term allows GW to make mass profits. The long term effects make it so that LESS PEOPLE SEE GW ON THE INTERNET AND IN THE REAL WORLD. With less companies being able to support GW due to their policies, this cuts off the market and gives them a monopoly on their product. The last I saw GW was a public company.
What one must realize, which I feel GW has not, is that brick and mortar stores are packing up shop and closing down in droves. The ones that are left have learned how to work the internet to their own advantage. Go into almost any local gaming store and you will find that 75-80% of their business comes from online sales. These stores have found a way to work with the internet and work it too their advantage.
A SOLUTION: First and foremost, if GW allows the ability to open up markets and internet policy changes to allow stores to sell online, this will start to help them. In the beginning, GW will take a tumble, and they will lose money, but if they actually allow the internet to become flooded more than they are now, then profits will start to occur. This will not happen over night, but will eventually make them profit. The LGS does the same thing, they offer tons of products at 30% off and beat out the other competition which in turn starts out with less profit, but as more time goes on they start to make more profit because of mass sales. Its like Billy Mays, who sold oxi-clean and other products. They based their company on selling TONS OF PRODUCT AT CHEAP PRICES, and believe it or not it worked. Simple answer for a huge company.
Price increases are apparent as well. Many times you have to raise prices to adjust with the cost of living, but lets look at the fact kids: In this market and current economy, your dollar is not worth what it was 10 years ago. Most businesses have lowered pay to wokers, laid off people and other things like raising insurance by 40% to the public. This means we have less disposable income. So how is a person like me who has had no cost of living increase and a reduction in pay in 5 years, and insurance premiums raised by 60% able to afford GW product when it goes up?
Plain answer: I can't.
I pretty much get most of my product from tourney winnings now, and I don't see that changing anytime soon.
So not only does GW need to change internet policy, they need to lower prices a small bit, and as we all can agree, get involved with the independent shops a hell of a lot more. I urge you to continue emailing GW (and their investors) throughout the year and have actually sent them two letters this week. This is the only way to illicit change. The higher ups have heard the rumblings and have responded slightly. Imagine what happens if we keep it up? Your less than loyal GW fan boy,
p.s. And for the love of Mork and Gork, please allow your IP to be used in a big hollywood movie. Just look at Marvel. Stock was $5 a share before Spiderman, it is now closing at, 54.10! allow a bit of help to that and watch the hobby explode.