• The Infractions Forum is available for public view. Please note that if you have been suspended you will need to open a private/incognito browser window to view it.

Leegin and RPGs

Destriarch

Sane Studios
Validated User
I'm not sure if UK law is concurrent with US law in this respect, but from the article you pointed to I see no major breakthrough there, apart I suppose from its use as precedent. However the case does specifically state that it is one in which a vast number of factors have to be taken into account. This law could therefore be a double-edged sword, since without a specific example from within the industry it is very hard to decide in which direction the judges would jump.

Ash
 

LBrownIII

Registered User
Validated User
It all depends on which publishers take advantage of it. Guild of Blades jumped on it within hours, but that won't have much effect on retailers. If WotC jumps on board, it'll have a very strong positive effect.
 

Spinachcat

Registered User
Validated User
I am not on-board with Ryan's reasoning. If a retailer can not discount a product that has been sitting on their shelf for months (or years), then I can not see them being motivated to buy anything that would be a risk. Sure, you may by the new White Wolf book, but why buy from a small press? The only way to be safe would be that all publishers would be forced to accept returns after X days. Wow, how many small press guys are going to be able to eat those dollars?

Imagine if a game store was not allowed to discount their 3.0 stuff once 3.5 came out and could not bargain bin their massive overstock of now obsolete games? What are the games stores supposed to do with any D20 Star Wars stuff now that SWSE came out?

So with this law, why would any store risk shelf space on products that aren't sure to move fast?

And what about on the greater scope? Let's look at grocery stores. If you have a perishable item that has a 6 month dating on it, under Leegin you could not offer it for discount as the expiration date approached. Wow, that's gonna be fun. I expect this ruling will be overturned in 2009. Retailers will be screaming.
 

Guildofblades

Retired User
Guild of Blades still claims to the small press moniker and our new price flooring policy, announce Friday, went into affect today.

We do offer returns on all in print products in sellable condition. Though it is for product credits that can partially of fully be applied to future invoices. Our logic is we have a diverse catalog that's reasonably large. If one product isn't selling, they can return it for credit and use credit towards the products that do find their mark.

That being said, our price floor terms only stipulate no discounting for 6 months after the initial purchase. After that, if the retail is "overstocked", then they can discount below the floor we set at 80% of MSRP. But they may only discount a number equal or less than the number of units of the same item they sold over the previous six months or 6 units, whichever is greater.

The logic here is most stores will try and sell it at or near MSRP for the first full six months. For those stores that are hyper sensitive about their shelf space and product rotations, after six months they can discount as needed and clear it out. But only up to six units unless they actually sold more than six units in the previous six months....which if they had, one wonders why they are discounting in the first place, because for most FLGS 6 units sold per product in 6 months is pretty darn decent. But the rule was set just in case someone takes a huge stake in a product and buys an initial inventory of say, 35 units (its happened a couple times before) and maybe they only sell 12 units. They are sitting on 23 units still and feel their full MSRP sales have slowed and the only way to chew threw the remaining 23 is to discount them. Over the next 6 months they can then sell another 12 via deep discount, bringing their inventory back down to just 11 units, which can then be sold over the following six months. Though if they felt "stuck" at 23 units remaining, why they wouldn't just opt to use our return policy I don't know, but the option is there for them.

The policy shuts down the possibility of a deep discount shop buying up a hundred units and selling then all for a buck over their cost, pissing off a bunch of retailers and costing us several hundred units in lost sales as a consequence. Now B&M retailers can feel secure that on in print Guild of Blades products no discounter will remove their ability to keystone our products, or better. I can't promise success for everyone. All I can do is give them the best chance at it as possible with our product and then mitigate their risk with good discounts, providing a stable and fair reselling market, and offering our return policy.

Ryan S. Johnson
Guild of Blades Publishing Group
http://www.guildofblades.com
http://www.1483online.com
http://www.thermopylae-online.com
 

Destriarch

Sane Studios
Validated User
We do offer returns on all in print products in sellable condition. Though it is for product credits that can partially of fully be applied to future invoices. Our logic is we have a diverse catalog that's reasonably large. If one product isn't selling, they can return it for credit and use credit towards the products that do find their mark.
Aren't you worried that this will merely shift the unmovable mass to your own warehouses where it is even less likely to be sold? I mean sure, you're not giving refunds, but you'd still be sending out more stock that's cost more money to produce for what ammounts to free. And what about postage costs?

I'm also assuming that, in the description 'in saleable condition', you are excluding returns that are made because they did not arrive in saleable condition in the first place.

The policy shuts down the possibility of a deep discount shop buying up a hundred units and selling then all for a buck over their cost, pissing off a bunch of retailers and costing us several hundred units in lost sales as a consequence.
I'd be happy to admit that I don't have the broadest knowledge of gaming stores across the world, since there seem to be very few left in the UK where I live, but it can't help but strike me as extremely unlikely that anyone would actually do this with role-playing games, certainly not in this country. 10% discount for students is about as far as it goes over here, with occasional knockdowns for second hand stock and old stock clearances. Is there any evidence to suggest that this kind of activity is happening with the kind of regularity that could possibly have a knock-on effect on the whole industry, or is this just a precautionary measure on your part?

All this talk puts me strongly in mind of when Wizards of the Coast (or whoever it was that acquired the stock from them) remaindered the entire surplus of Everway, and it appeared in every cheap bookshop in the country for $10. I hope that's not going to happen as well, it really could prove a nasty stroke to the FLGS.

Personally, I'm not against price fixing per se, but I am strongly of the opinion, as others have already intimated, that it should be a time-limited deal (say, six months maybe?) after which the storeholder should be free to mark down however he sees fit. This recent legal u-turn is, repeating myself a little, a double-edged sword that has the potential to both harm and help the high street store.

Ash
 

LBrownIII

Registered User
Validated User
So many things wrong...
I am not on-board with Ryan's reasoning. If a retailer can not discount a product that has been sitting on their shelf for months (or years), then I can not see them being motivated to buy anything that would be a risk.
Clearance sales on stale product won't be affected.

The only way to be safe would be that all publishers would be forced to accept returns after X days. Wow, how many small press guys are going to be able to eat those dollars?
Outside of gaming? All of them. Make a product that sells and there won't be any returns.

Besides, I don't see returns becoming a standard part of the RPG industry in the near future.
 

Guildofblades

Retired User
>>Aren't you worried that this will merely shift the unmovable mass to your own warehouses where it is even less likely to be sold? I mean sure, you're not giving refunds, but you'd still be sending out more stock that's cost more money to produce for what ammounts to free. And what about postage costs?<<

Well, for one, we don't get a large number of returns. Originally our policy was any return for any reason for full credit and that credit could pay for any order. But we had a couple stores overly abuse the system as a stock rotation system. So we simply changed it so a credit could only pay for half of any future order and put minimum orders at $50. Still extremely reasonable.

We're not to worried about the stock coming back at us. Because we produce in house we rarely have "too much" inventory. Our robust e-commerce sales makes the small amount of returns a non issue. If, however, we ever did get a large amount of returns on a single product, then its probably a good sign we should discontinue its production. Once discontinued the price floor terms disappear and we are free to liquidate it to recoup our manufacturing and carrying cost on the item. Our business success is not tied to any one product, so if the market dictates something should be discontinued, then that's what happens. We've discontinued plenty of products in the past and just kept the gems. Postage cuts a bit into our profit margin, but in most cases its worth keep a retailer happy so they'll be on board to keep selling our stuff. Though I must say, the dedication level "most" retailers are willing to give to the business of any "small" manufacturer these days is somewhat starting to put that in question. For any business relationship to be a good one, the commitment must flow both ways. A very large number of retailers these days seem to care not one iota about a manufacturer if they aren't WOTC or one of the other multi million dollar corporations. An irony considering few retail stores have that status themselves.

>>I'm also assuming that, in the description 'in saleable condition', you are excluding returns that are made because they did not arrive in saleable condition in the first place.<<

It is assume that when we sell a product to a retail that we will deliver to them a product in sellable condition, so if it arrives damaged, then we usually just give them a credit for it. Or, just to keep some folks honest, request the return the damaged ones for credit (had a couple distributors that used to always claim damages when there were none, just to get a credit kick back, then went ahead and sold the "damaged" copies like any others). lol.

>> Is there any evidence to suggest that this kind of activity is happening with the kind of regularity that could possibly have a knock-on effect on the whole industry, or is this just a precautionary measure on your part?<<

Companies like Amazon.com regular sell gaming products at 30-40% discounts. A whole lot of products, if Amazon can get them via regular distribution channels, are sold thusly. Amazon can't currently get our products in that fashion since we don't distribute to the book industry or through Diamond and we closed our associates account when back in like 98-99 for it being too much a pain in the rear for the sales it did generate. But yeah, at this point, pretty much a precautionary measure. No good reason not to do it.

>>Personally, I'm not against price fixing per se, but I am strongly of the opinion, as others have already intimated, that it should be a time-limited deal (say, six months maybe?) after which the storeholder should be free to mark down however he sees fit.<<

I'm not into price fixing either. However, I have the opportunity to both preserve the perceived value of our brands and to level an unfair playing field with regards to retailer competition for the sale of my goods while generating an environment to potential foster more overall sales competition for those goods. Thats just good business sense any way you cut it. We have not fixed any prices, simply established a minimum sales price. There is still a lot of range in there for rewards programs, loyalty cards and discounts, sales, and even the possibility of selling above MSRP should a store care to. They just aren't allowed to devalue my brands by fire selling them the moment they order them from us.

Ryan S. Johnson
Guild of Blades Publishing Group
http://www.guildofblades.com
http://www.1483online.com
http://www.thermopylae-online.com
 

Destriarch

Sane Studios
Validated User
It all sounds very complicated, and if (as Lloyd says) stock clearance sales aren't affected I'm not at all sure how it will make much difference at all, but I hope it all works out to the advantage of the industry. Especially in the case of Amazon, I wouldn't be at all surprised if they just ignored the limitations and carried on discounting. Still, I guess you can always stop selling to them. Shame to lose an outlet, but what other sanctions could anyone afford to levy against them?

Ash
 

Spellslinging Sellsword

Registered User
Validated User
Points to consider:

  • The case was remanded, which means that the lower court may still find the practice illegal, it just now has to consider market factors and the economic impact of the agreement rather than treating the agreement illegal per se.
  • A 5-4 split decision sets a weaker precedent than a unanimous decision; businesses will have to see how future cases differentiate issues to more concretely understand the implications of the decision.
  • If Wizards of the Coast and White Wolf adopt the strategy, then it is likely to be seen as anti-competitive due to the market dominance of these two companies. In other words, if it becomes uniform practice, then it has a higher potential to have an anti-competive effect and therefore to be found as illegal by the court.
  • The case deals with a company that manufactures belts, a high substitution item. How much substitution actually occurs in rpgs? I'm not sure that consumers would prefer one brand game, but substitute a different game due to its lower price.
  • Part of the court's reasoning seemed to imply that their intent is to allow boutique branding; does the rpg market have sufficient customers to support products that rely on this style of branding for sales? I have trouble seeing a day where people buy Dungeons and Dragons because they can't afford the new Mercedes RPG. Or similarly, people seeing a Mercedes book in someone's hand and saying, wow, he must be well off because he can afford to buy the Mercedes brand of rpgs. It seems unlikely that an rpg manufacturer would seek to brand its products for wealthy people as this would limit the customer base to such a small amount, it seems unlikely to be profitable.
  • Amazon's market share in the book trade is large enough that companies are probably willing to rely on the increased sales that Amazon accounts for over small local stores. Ryan seems to indicate that this isn't the case for the rpg industry, but I'm leery of that conclusion.
 
Top Bottom