When I was building my Jeep, I was pricing bumpers when I noticed some companies, like Smittybilt were priced all over the map. Buying anything from that company made me feel bad. I always felt there was a better deal somewhere out there I wasn't aware of. Their products were middle of the road, with some very good and some very bad. I would buy things from them, use them for a while, and quietly take them off. Their reputation was ... mixed. Their shotgun approach to sales and quality are infamous.
Meanwhile there was AEV, American Expedition Vehicles, a high end company started by Jeep engineers that sold a narrow range of products, all highly engineered, and never more than a dollar or two difference between suppliers. One customer complained in an online review about how retailer prices were so similar. A retailer explained if they were to sell AEV products for a dollar less than their agreement, AEV would cut them off. So at the most competitive level, all product was sold at nearly an identical price. That's the difference between no brand value protection and brand value protection.
The advantage to the retailer is clear. If I'm selling a bumper, I would rather sell the premium product for $1,400 rather than the squirrelly discount product for $700, or $600 or whatever the market will bear that day. The manufacturer of the high end product is partnering with me. The higher priced manufacturer is maintaining value in their supply chain, maintaining a strong reputation, and thus selling to a well heeled clientele rather than a bunch of mud boggers looking for the lowest price. They make more money, which allows them to engineer quality, and the cycle continues. As a retailer I can decide what products to sell based on where I place my store in the marketplace. I can build a high end store and sell high end products at higher prices or I can sell everything, good or bad, and be the Smittybilt of retailers.*
Wizards of the Coast just dropped their MSRP on all their products going forward. If there is no price, there is no need for price protection. Ironically, this is exactly what I've called for many times in this blog, yet I'm disappointed and a little worried. What I was hoping for was possibly a bit utopian. I want to run a retail environment where price is inviolate and off the table, where I can focus on customer service, and events, all the various joy producing activities with the assumption customers will judge me based on my joy production, rather than my prices.
I would rather sell packs of stuff at a price than a shiny piece of card stock of subjective quality at a constantly fluctuating price. Yet the ability to sell the packs has fallen while the sales of the variable shiny has risen. It requires expertise and a fiddly system to sell variable shiny while it's much easier to sell new packs at a set price through my retail operation. And because it's so much easier, absolutely everyone can do it and I'm losing that battle. One reason stores close we don't discuss is they can't run the kind of store they want, and this is one example. They want it one way, but it's the other.
Asmodee has brand value protection as does Games Workshop. They're still competitors with retailers, but there are price floors that help me sell their goods. My initial reaction is to shun Wizards of the Coast and embrace Asmodee and Games Workshop as best I can. Their strategies are retailer friendly, while Wizards of the Coast feels predatory, the game trade equivalent of the soy bean king, selling their products as commodities. I have heard the next step may be dropping pre releases, and that right there is an exit strategy for quite a few stores that aren't Magic centric. We run events to get the cool stuff. Butts in seats! If you're going to drop events, you've removed our golden handcuffs. Don't get me wrong, I like gold, but the disconnect between "go buy on Amazon, but play at your FLGS" really pisses me off. Watching it all burn has great appeal.
This is all overly dramatic. The reality is nothing will really change. The offroad store will happily sell me that $700 low end bumper or the $1,400 high end bumper and they'll happily agree with me when I mention the value of the low end product or the superior engineering of the high end product. There are few retailers who get to truly pick their market position. Likewise, I'm not going to shun Wizards of the Coast any more than I'm going to turn my game store into AsmodeeLand. I will serve up both to the best of my ability. I will do my best to attract the Asmodee customers but I won't turn away Magic money probably ever. Taking stands is for politicians and priests. I have no such requirements for ideological purity.**
In the end, there's a lot more going on than my own needs. These brand value protection schemes are delicate flowers. Hasbro just discovered this when they were sued for instituting brand value protection in Europe. The larger the company, the harder it will be to institute brand value protection policies, as they conflict not only with international law, but laws between states. There is also the problem of brand value protection schemes holding independent retailers to a higher standard than mass market retailers, which is inherently unfair, even if we do cause most of our own problems. It's no surprise the consensus at WOTC was to have a consistent message on pricing. Do what you want.
*This is the same argument I've made for industry wide net pricing, by the way.
**But if you gave me a bucket of money, I would diversify away from the game trade.
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