I know several people are on-record as being disgusted with the current RPG distribution system. I couldn't help but think about this as I was browsing the Pulsar Games website and found the following line in the news section: "The company is doing well, but our fulfillment house sold a years worth of product and never paid us."
I can't imagine how this could have happened without legal recourse, but I hear stories like this regarding gaming distribution all the time.
I know this has been talked about this before -- and people are welcome to point me to some threads -- but I'm curious as to people's anecdotes on this. Not just "I got screwed" stories, but also "the distribution system works fine for me" stories and, above all, a sort of "lessons learned" -- that is, what advice you'd give to a fledgling game company based on your experience.
Edit: Certainly I found the following threads to be interesting in this respect:
We (Linda and I) went to GTS 2003 with the initial plan of scouting the competition, seeing what others were doing, taking photos of Ron, and meeting retailers directly. As a side mission we were going to talk to fulfillment houses and distributors. For the record, we met with Tundra, Excelsior, Impressions and Osseum. They were all very polite and very different. Jim Fallone from Osseum was very professional and showed us a wide range of professionals that he works with (artists, writers, layout people) and immediately had constructive criticisms about our first book, Tales of Gaea. He sat down with us twice, IIRC, for at least an hour. A very promising indicator. Thom from Excelsior did not have time to talk with us directly as he was manning his booth and battling food poisoning but made the case for Wxcelsior as a sales agent rather than a fufillment house. He would sell your goods to distribution but you could sell your goods as well. Exclusivity is something I will get to in a moment. Thom gave us the impression that he was very hands off. He would help you out but only if asked. We also met with Woody from Tundra. Tundra is just down the road from us. He did not so much meet with is as we stood by the booth and chatted. He functioned much like Excelsior and did not seem very interested in what we had to offer. We met with Aldo and he seemed to be the right mix between helper and letting us do our thing. He started by saying he had something like 1/2 hour to talk. He was very busy and had just picked up a lot of Wizard's Attics customers and was still dealing with that. An hour later we were still talking. He really wanted (and still suggests) us to build out character generators like the CHARGen for other people. I am still considering.
To sum up what worked:
1) We got a lot of great comments about the shirts we wore. They had our Tales cover on them and it is an awesome cover.
2) We had our business plan done including our exit strategy, marketing plan and cost analysis. In short, we were able to present a clear concise business presence that was not on how cool our game was (which it is ) but based on business. How would we make sure that HinterWelt would be around for GTS 2004 and beyond.
3) We had a strong presentation thought out ahead of time. We had our laptop ready with the CHARGen set up, business plan ready, and a mock up of Tales of Gaea. We also had an awesome hand out detailing our 2003 releases, how much they would be, how we would work with retailers, and a summary of our strategy.
4) Linda and I are both very accustomed to speaking in public. We possess, I believe, excellent and professional presentation skills. For one, dress in corproate casual. Look people in the eye when you talk to them. Allow them to speak. Comport yourself professionally (i.e. don't swear, spit, or scratch yourself). You may laugh but you would be amazed the number of people who dressed and behaved like fanboys and then wondered why businessmen did not take them seriously.
Why did we go with Impressions:
hmm, with the understanding that Aldo reads these boards I hope he will be understanding in my statements. After the show, Linda and I put our notes together (another good practice is to take a moment after every meeting and whritedown those items at the top of your mind) and decided it was really down to Impressions or Osseum. Osseum had a much more solid feel to it. Jim has some great experience in the book trade and would have been a great help in getting us into the Waldens/B&N etc. They also had some great connections in terms of artists, companies and the like. They were the most expensive but seemed worth it. Impressions seemed smaller, but had a firm grasp of what it meant to be a small manufacturer. He had a great reputation in the industry ( and still does) and most of all, would let us do it our way. He woudl sell what ever we tried but would also give us the intel we needed to make educated decisions. It is one thing to be told you will make a d20 supplement or die on the vine, it is another thing to be advised that d20 core rules are selling between 800-2000 without trying. We were about to call him when he called us offering to work with us to get our books out into distribution.
What to look out for:
Exclusitvity: Many of the fulfillment houses require you to work only with them. This makes sense from their point of view but has always been a little fuzzy for me. There job is easier if they do not have to fight each other to get into the distributors but as I have said, they also have different strengths.
Not selling to Retailers: This makes sense again. Distributors will not buy your product if retailers are already getting it from you at the same or a deeper discount. This makes the Fulfillment houses job tougher so they ask that you not do it. I have given my word to Aldo and it is as good as any legal contract. You can sell all you like online.
Discounts: One of the reasons a game book will sell for $50 is that the manufacturer (going through fulfillment) only gets $16.80. Before you scream that this is whay distribution is broken understand that this is not excessive. Manufacturers in other industries deal with it to. The problem more likely lies in the demand. Demand for a title (Hardback, 240 pages, $35) is around 400-500 copies and fluctuates somewhat but comes out of the distribution cycle with grosses about $4700 - $5880. Selling on line at $35 it would take 168 book sales. WOTC could do that with their worst publication. Small publishers...over along enough period of time. Bill collectors are not known for patience.
If you read this far give your self a cookie. I am a long winded bastard and all of this is from my experiences in the industry.
Originally posted by xiombarg Okay, you're approaching what I'm looking for.
You don't have to name names unless you want to, but: How did you approach Impressions? Why did you pick them? etc.
The idea here is to make things a bit more transparent to people new to the system.
Linda and Bill picked me because I had a great beat and I could dance to it...har har (that joke may be a little before some folks time...)
There is no harm in actually saying names online because the situation you mention about Pulsar happened to dozens and dozens of companies during their time at Wizard's Attic (and that has been discussed before). Things just didn't work out and it is my understanding that some folks are still getting payments and some are not. Again, I am not bashing WA because I know the former owner probably still reads here...things just didn't work out.
At the time Impressions was starting, WA was the largest in the market. Many started leaving WA because of lack of payment and did not want to be out of more money. In the end, Impressions worked with WA to absorb their clients at the beginning of this year. In the process though, folks like Pulsar and 40+ others were told by me that their sales did not justify continued representation in the market. It was a tough business decision as I knew most of these folks from my Wingnut Games side of things...but when companies are selling 2 copies of their game to DISTRIBUTION per month, that is a failed line.
Personally, I think that because both Impressions and Osseum work from home and we each contract an outside warehouse company to ship, it has reduced our overheads where the business model works...WA had two warehouses to run with employees.
Choosing a consolidator is a tough choice, but right now, the market is so bad for game sales that most distributors will not carry lines as they only want to order a small amount and don't bother to because the order quantity is so miniscule.
Best,
Aldo
__________________
Aldo Ghiozzi
Owner
Impressions Advertising & Marketing
(925) 240-0862
eFax (240) 220-8780 www.impressionsadv.net
Yahoo! IM: wingnut_94015
***Former publishers of GameBuyer Magazine
***Sales & Shipping Company To Hobby Game Distributors Worldwide
***Learn More About Free RPG Day On June 20, 2009!
Originally posted by HinterWelt Long story longer...
Bill
On a tanget Bill, since you're here and all....
I just went to your website and noticed that you have a retailer locator for those FLGS who carry your product. I had a few questions about this for you.
1. Is the benefit worth the effort?
2. Is the benefit for the customer or for the retailer?
3. Is it a great excuse to contact retailers to (if they carry your product) show them you're working to help them sell your stuff or (if they don't carry your product) to inform them of your product and that you'll work to help them sell it?
If you don't want to publicly answer for whatever reasons my e-mails josephbrowning@exp.citymax.com and if you just don't want to answer, that's fine as well.
Originally posted by jgbrowning On a tanget Bill, since you're here and all....
I just went to your website and noticed that you have a retailer locator for those FLGS who carry your product. I had a few questions about this for you.
1. Is the benefit worth the effort?
2. Is the benefit for the customer or for the retailer?
3. Is it a great excuse to contact retailers to (if they carry your product) show them you're working to help them sell your stuff or (if they don't carry your product) to inform them of your product and that you'll work to help them sell it?
If you don't want to publicly answer for whatever reasons my e-mails josephbrowning@exp.citymax.com and if you just don't want to answer, that's fine as well.
Thanks!
joe b.
Joe,
No problem, there are few things I will not publicly discuss.
First, is the benefit worth the effort? hmm, contact retailers, IMHO, is one of those real benefits in an of itself. Retailers can be a powerful, and relatively inexpensive, agent for your game. Don't get me wrong, they are not going to back your game just because you have a locator but it is one part of the puzzle. Retailers want to know you are trying to help them. This is a relatively easy way of doing so. Retailers contact me or I contact them and I put them on our site locator. I would do this for a retailer who does not carry our product (although I ask them to carry our product on our site) but it would be kind of silly not to carry our product and be on our locator. Just to be clear we call and talk over things (how business is doing, what can we do to help, state of the company) with the retailers on the list. We do not go through a lot of verification as to whetehr they are carrying our product.
Is the benefit for the customer or the retailer? Yes. It is for both. Customers may be cruising our site and end up on the retailer locator and find a store they did not know about. That is a benefit both for the retailer and the customer. Customers can find our product, Retailers appreciate the exposure so we build good will to visitors of our site. A benefit for us.
As for your third question, Yes it helps. Cold calling retailers in this industry is not as hard as other industries (I had to do some of that in sales and IT). Most retailers, if you introduce yourself right away and ask them if they have time to talk, will be willing to chat about your game.
I have been approached by both Impressions and Osseum. I haven't had a chance to "sit down" with them because I have been so busy this week, but both seemed extremely professional and had a lot to offer.
One question I have is the discount you used above, suggests a discount of 66.4%. This is in sharp contrast to the standard 55% with 5% early pay discount. What does a manufacturers get for the additional 6.4% to 11.4%?
Seems like a rather stiff fee. Perhaps not for vanity press, but for meduim sized companies which can reasonable expect 30k to 50k units per year in sales, that can really add up.
Originally posted by hellsreach I have been approached by both Impressions and Osseum. I haven't had a chance to "sit down" with them because I have been so busy this week, but both seemed extremely professional and had a lot to offer.
One question I have is the discount you used above, suggests a discount of 66.4%. This is in sharp contrast to the standard 55% with 5% early pay discount. What does a manufacturers get for the additional 6.4% to 11.4%?
Seems like a rather stiff fee. Perhaps not for vanity press, but for meduim sized companies which can reasonable expect 30k to 50k units per year in sales, that can really add up.
If you are doing 30-50k units per year then you probably do not need a fulfillment house. Aldo will probably shoot me for that.
Small companies, say 3000 units per year, need someone to get them into distribution, ship to distributors, market to distributors, and most important, collect from distributors. If you are doing say 40,000 units (40,000 x $25 MSRP x.6 distributor discount = $400,000 per year gross) you are not a small/medium manufacturer, IMHO.
For us little guys, 6.4% is worth it, again IMO. Again, 55% with early pay is what West End Games might get, HinterWelt will get 60%. Small publishers do not have the bargaining power of larger publishers.
Hope that helps and WEG Star Wars is still the best!
Originally posted by hellsreach I have been approached by both Impressions and Osseum. I haven't had a chance to "sit down" with them because I have been so busy this week, but both seemed extremely professional and had a lot to offer.
One question I have is the discount you used above, suggests a discount of 66.4%. This is in sharp contrast to the standard 55% with 5% early pay discount. What does a manufacturers get for the additional 6.4% to 11.4%?
Seems like a rather stiff fee. Perhaps not for vanity press, but for meduim sized companies which can reasonable expect 30k to 50k units per year in sales, that can really add up.
Actually, most of our fees stem from the first establishment that we give 60% off retail across the board to every distributor as most smaller game companies do not have the power to do 55%/Net 10. The big junk of my 16% off the 60% (66.4% in total) goes to paying for the shipping bills alone. My UPS bill is my biggest expense every month. Most of my clients like the fact that they are not "wasting" their time packing boxes. The biggest benefit that I try to hold true for Impressions is that we are dedicated full time to getting your product into the channel. No more splitting up your time between writing, editing, art, layout and THEN distributor conversations.
In respone to Bill's point about WEG maybe not needing a fulfillment house...sure...its possible...most likely probable...but several of my clients don't need the benefits of consolidation. They just want someone else picking and packing. Impressions is organized with shipping to the distributors every week, and with that, distributors are able to even order 1 unit of our client's products as mainly a customer service angle to their retailers. That is the key. It is not the shipping, but the consolidation helps to *almost* guarantee that a gaming company will never lose even one sale because a distributor says "oh, I can't get that right now because their minimums are too high."
Beyond all of this, GameBuyer (our monthly retailer publication) has just hit 1 year old and grown to give our clients and many other game companies continuous exposure to nearly 4,000 retailers every month. GB started out at first as a printed Impressions catalog, but has captured the interests of retailers with its focus on the marketing of games and the support manufacturers give them.
In the end, I believe any manufacturer should pick up the phone and ask the distributors point blank, "What do you think of these companies?" They will be the best ones to gauge who is right for your company and your company's model.
Best,
Aldo
__________________
Aldo Ghiozzi
Owner
Impressions Advertising & Marketing
(925) 240-0862
eFax (240) 220-8780 www.impressionsadv.net
Yahoo! IM: wingnut_94015
***Former publishers of GameBuyer Magazine
***Sales & Shipping Company To Hobby Game Distributors Worldwide
***Learn More About Free RPG Day On June 20, 2009!
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