Selling Your Games in Game Stores

Paul's picture

The advent of crowdfunding means that many great games that would never have been published in years past now have a chance to be printed and enjoyed by a wide market. Unfortunately, many Kickstarter-focused publishers miss out on attracting a wider audience for their games due to a lack of knowledge about the traditional sector of the board game industry.

Many smaller publishers, including Greater Than Games, sell games via Kickstarter and web stores. We also occasionally sell directly to retail stores, in particular in conjunction with new product releases. However, the vast majority of our sales are to a relatively small number of game distributors, who then in turn sell to the many hobby gaming stores around the world.

The advantage of this type of market is that it greatly simplifies operations for both publishers and stores. Instead of ordering from dozens or even hundreds of publishers, a store owner can order all of their stock from one or two distributors, dramatically simplifying the ordering process, and saving on shipping. Similarly, rather than tracking down the massive number of shops selling hobby gaming products around the world, I can sell to several dozen distributors and know that stores all over the world have access to my products.

The disadvantage of this type of market is that it adds another middleman to the supply chain who then needs to take a portion of the profit from sales. Typically, a distributor will purchase games in bulk from a publisher dozens to thousands at a time, and get a 55% to 65% discount off of the MSRP of the game, depending on the particular publisher, the particular distributor, and the order volume.

Distributors generally also require free shipping to their warehouse locations. Most large US distributors have several locations around the country, and will typically place separate orders for each of these locations. Fortunately for US-based publishers, most distributors based outside the US have freight forwarders in the US, and only require free shipping to these domestic locations.

Due to these realities, a publisher seeking to sell their game to a wide audience through traditional brick and mortar local gaming stores must have enough margin to sell the bulk of their games to distributors at these terms. A good general principle is that the manufacturing cost for a game should be no higher than 20% of MSRP; this will allow it to be sold at 35%-45% of MSRP to distributors with enough profit to pay other associated costs, such as shipping, packing, design, art, etc.

For companies that rely on Kickstarter or other crowdfunding sites for the funds to create their games but still wish to sell their games to distributors, it is important to select an MSRP based on these realities. The higher profit margin associated with Kickstarter sales (as opposed to distributor sales) can then be used to pay Kickstarter fees, help subsidize shipping costs, and provide cool stretch rewards to backers.

Comments

phantaskippy's picture

Cool blog.

I assume the discount the Distributor gets is a good bit better than having to fund a much larger distribution operation in house, while alse greatly increasing game exposure to store purchasers.

I don't know if you want to get into any specifics of >G but if it is okay, how large of a storage and shipping operation do you have to keep in house with this arrangement?  I'm just curious as I've worked logistics most of my adult life and minored in economics in college.  

Paul's picture

For GTG, our shipping and storage operations is actually fairly substantial considering the age and size of the company. We have ~7700 sq. ft. of space, about 6000 sq. ft. of which is warehouse. It includes a parcel shipping area, about 20 8' bays of pallet racking, 3 dock doors and a forklift. I'll probably make a future post going into details about what is necessary vs what is nice to have for shipping and warehousing, etc.

phantaskippy's picture

That is a pretty good setup, will be nice to have when the new games all start shipping.

arenson9's picture

Yeaahhhh! Love this stuff.

PlatinumWarlock's picture

Very insightful!

My RPG, which was Kickstarted at the end of last year, is verging on publication--I'm waiting on a few last-minute art pieces and a finalized PDF from my layout guru--so any sales data is useful data, even when in a different product line (print rpg vs. board game).

On the plus side for me, I'm publishing through a print/publisher partnership (my company, Blackfall Press, LLC and my publisher, Chronicle City), so I have less to worry about in terms of warehouse space and physical shipping issues.  However, that comes with it's own drawback--the fact that I'll be profit-sharing throughout the process.  However, as I'm not looking to make a "full-time" gig of this--though I might like to, if my game takes off!--it's not a huge deal currently.

 

Paul's picture

@PlatinumWarlock

Cool! I'd definitely be interested in hearing how that goes, and what works for you and what doesn't from that process.

GTG is actually beginning to offer warehousing and fulfillment services to other companies. If you are interested for any future products, definitely send me an email and I can get you more info.

PlatinumWarlock's picture

@Paul--There may be some interest on my part, as I have two prototypes for board games already made, and a third one that's been on the back burner for a while...right now, my focus is on getting Cold Steel Wardens out the door, then working on fulfilling all of my kickstarter rewards and writing the next book.