Saturday, May 28, 2011

Update on GW price and embargo

Recently a letter was sent by one of the members of the face book page group GW Australia and New Zealand Price Petition Link

The letter is as follows:

Dear Mr Wells

I would like to thank you for your e-mail dated 18 May 2011 in response to my questions regarding why we in the southern hemisphere pay twice as much for a box of tactical marines as do our European & American counterparts. Granted, the correspondence I sent was quite short which is why I am assuming it warranted a standard letter with such a large amount of illogical and rushed justifications all over the place.

I refer mainly to the following

"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. "

As you have an MBA from the University of Stirling and are the CEO of a large niche company I take on board that you are not stupid. Please do me the same courtesy & don't refer to the opportunity to pay the same currency value to a supplier as our UK counterpart hobbyists do as a 'deep discount'.

"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."

In the same frame of mind please do not describe your business practice as a 'service free of charge'. In the same way for example as a door to door salesman does not refer to his sample bag as a 'service provided free of charge' or a vacuum cleaner salesman in a mall doing the special example with the bowling ball does not refer to it as 'service free of charge'. Not being stupid, I am sure you do realise that the things that you have listed induce sales and are a key part of your sales strategy. So does everyone else on the planet. Please also note that the majority of people who have been affected by this embargo are in fact people who do not use the 'services' offered.

"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. "

Please be aware that in Australia the amount of GW run events is now at a minimum. The majority of events tournaments and conventions are run by independent stores and individuals such as myself. The argument that the overseas resellers do not put support into growing the hobby is completely moot as currently neither does GW with any kind of real impact. The bulk of this in Australia is carried out by the bricks and mortar LIS stores. Who would in fact benefit more from you equalising Australian price tags to the UK than they will by you cutting off the overseas resellers. As it does not change the fact that you are pricing people out of the hobby.

"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."

This is patently ridiculous. Your main target group may be the age group 10-14 however pitching your e-mails at that level is a mistake.

Rents in Australia are not twice that in London. Wages in Sydney are not twice that in London. Do your suppliers here charge twice as much as they do in the UK? Therefore by your example there is not actually a justification for charging twice as much.

"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."

This is also not true. With the current round of actual price rises, raising a squad of tactical marines from $65 upwards yet again, and the release of resin miniatures that are 20% cheaper to make (source, your investor site) but expected to be 5-25% more expensive, you are quickly strangling this hobby in Australia. You could have actually reduced your prices, made the hobby more accessible to a larger target group and stifled any discontent. People would have been happy to pay an additional 50% rather than an additional 100%. Still huge amounts more than in the UK/USA, but people wouldn't have cared about that as $50 AUS for a box of marines seems cheap. Being ignored or treated like simpletons has just made things worse.

Other companies do not indulge in gouging of this level purely because they feel that they have the monopoly in a market. Food, fuel, clothing, and consumables are all affected by the strength of an economy. Prices do go down as well as up. This can be an important factor in keeping your customer base.

So again, and with feeling, how do you justify charging people such a higher amount for a product in one location as opposed to another? Is it intentional that we in Australia should feel like second rate GW fans who are supposed to be okay with this? And why on earth would you declare a price rise on the heels of all of this? Are you in fact trying to antagonise your repeat customer base?

As mentioned in my original correspondence have been a fan of games workshop since 1990. It has supplied me with two decades of enjoyment, and I have myself purchased many, many thousands of dollars of your products, as well as being actively involved in promoting this hobby to new gamers and old through tournaments and running of clubs.

This will effectively cease as

I do not believe that this is a hobby that has value for money or effort.
I can no longer support or endorse a company who thinks so lowly of its long term promoters
I cannot run tournaments promoting a hobby for a company that does not support its player base.

Matt O'Shaughnessy

Tournament Organiser Demonicon 1-4
Tournament Organiser SACON
Tournament Organiser Bad Friday
Club President TSC

Supporter of your business since 1990

(p.s. not sure if it was intentional but it seems like everyone in Australia who wrote to you got a nice form letter that didn't really address much. However everyone in Australia who wrote to GW Oz received a pdf entitled 'Generic Response' which is just rude, and still didn't address much. Why didn't you just post something on the site, then noone would have cared about GW being impersonal)

And this was the response :

Dear Matt,

I've read your letter. We clearly disagree. There's not a lot more I can say.

I'm sorry you feel this way.
Yours sincerely,

Mark Wells


Well Suffice to say I think that pretty much sums it up for Australia, they clearly have a view we are willing to pay more for like product. 

I stand by my earlier comments I no longer will purchase from GW and will seek alternatives for models etc to continue playing and building collections. 

What are your thoughts on the matter?