What do Retailers Want?

This past month Dani and Eliot traveled to GAMA Expo, the one-stop-shop for your friendly local game store (FLGS) to find the newest games that they are going to stock this year. One of the most interesting conversations Eliot had was with Anthony, owner at Derby Comics and Games from Shelbyville, KY. Our conversation was wide-ranging on all things game design, publishing, and retail. At some point Eliot started asking, from the perspective of a Retailer, what does a perfect Kickstarter look like to Anthony?

His essential ask was this:

1. Retailer backer level for $10 - essentially a $10 down payment with a plan of later purchasing the game. 
2. The retailer needs to have access to purchase all upgrades and add-ons
3. Designers call the retailers right before manufacturing to ask for quantity and payment.
4. Each copy they buy is at wholesale prices (%50 of retail price).
5. They want to be able to buy five copies and get one free ( a store copy).
6. Free shipping.
7. Their games would ship to the store before the normal backers get games.
8. Include a "how to sell the game" paragraph in the carton of game boxes. 
9. Our website should have a store locator indicating they can buy the game from select FLGS.
10. The back of the box should enable retail staff to run a customer through an example turn.
11. Have real, candid reviews they could review on BGG, not just our friends that rated the game a 10.

Doing some rough calculations, on a $50 game, we'd be sending $300 of games to their store with the prospect of getting around $100. In other words, an FLGS backs your Kickstarter, they want 66% margin. This would be a perfect Kickstarter for them. 

Looking at this list, it seems like a mountain to us. Eliot talked with a number of other FLGS owners at GAMA Expo and they expressed some similar ideas and help us add a few items Anthony had not originally included. Some of the FLGS owners even suggested that they should be allowed to not put money down until the games had shipped and arrived in the US! (They wanted to delay any purchases as long as possible to keep their cash flow free.) All of this left Eliot bewildered as to what we are actually getting out of this deal. How does it benefit our company to only make 33% of the retail price on a game we have slaved away for over the last two years? Additionally, some of these items directly conflict with what individual backers want. If the games go to the store first, why back on KS at all? Just wait for it to go retail.

​After marinating on these ideas for a few weeks we came to a few conclusions as to why we think this is actually a reasonable deal, especially for a new company like ours that is just starting out.

• The monetary amounts are small and the difference between the typical wholesale price of the 6 games ($150) and the actual price we were getting ($100) was pretty dang small. We could chalk that $50 difference up to goodwill with the FLGS and a thank you for them taking a chance on our game.
• Just because the first order from that FLGS is at 33% retail cost does not mean that subsequent orders will be at that price. We can move repeat orders back to 50% plus free shipping, resulting in around 45% of the MSRP flowing back to Tessellation Games, a 12% increase from the first order.
• This is all about the long-haul. The games that make real $$ are the ones that are ordered and reordered and reordered. Our ideal situation is that this game is a hit and FLGS owners want to order more. If they don't, we haven't made something interesting enough for the market and we should just focus on recouping our capitol and moving on! 
• For a $100 order, any game company worth their salt can pay that upfront (before manufacturing starts) and doesn't need to wait for manufacturing / shipping to be completed. $100 is not a large lift for a company, especially when they stand to potentially triple their capitol. 
• We should also think about sales to FLGS as advertising. (Thanks to Doug, the designer of For All Mankind for pointing this out to Eliot). Some of the folks that buy the game from them and play it will try and order copies online. Eliot believes we can make 70% margins on those copies assuming we are paying someone else to do our fulfillment (more on that in another post).
• We don't have to offer all of these elements as part of the Kickstarter, but we should be cognizant that the more we offer, the more retailers will support us. We have to balance these retailer asks with regular backer desires as well.

I want to thank Anthony and all the other FLGS owners we talked to as we try to understand how we can collaborate to bring great board games to the public. We're still trying to figure it all out.