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Appealing to retailers with a KS pledge

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adversitygames
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Is it worth doing?

I thought this was appealing at first, retailers might drop more money, maybe help spread the word if they tell their customers they're a backer. But I've been thinking over this one and running the numbers and I don't think it's going to work out.

First of all, you're asking the retailer to:
1. invest a reasonable chunk of money (assuming we're talking about eg selling them 6 at once, even at half MSRP)
2. invest their shelf and storage space

It's more of an investment (and so, more of a risk) than just a single copy of the game.

Secondly, if you're selling to retailers right away, potential customers might already be thinking "it'll be in my local shop, I'll just buy it there".

Thirdly, you aren't going to make as much out of it. It's going to *increase* the cost of that KS pledge (eg say your normal pledge is $40 which takes $20 marginal costing in printing+shipping, while your retailer pledge is 6 copies for $120 which will take $90 in printing+shipping (lower shipping per unit than 6 single units))

So you're getting proportionally much less extra towards your overheads (artwork/marketing) per pledge for the retailer pledge than the customer pledge ($20/$40=50% while $30/$120=25%).

Which means if you balance your campaign budget for say 200 individual pledges (@$8,000) giving you $4,000 for overhead costs, then you (worst case) get fully funded by retailers (~70 retailers = $8,400 funding and $2,100 left for overheads) you've just missed your funding requirements!

Ie every retail backer (if you're offering a good enough deal for them to bother backing) actually reduces the *proportion* of the funding that is left to go to your overheads.

I guess it could work if you set a hard limit on number of retailers you'll take (like, say, 10). But I don't think it's attractive enough for retailers in the first place. They need to look after their shelf/store space really carefully.

let-off studios
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Group Buy Vs. Retailer-Only

I'm not a retailer, but I know a couple local shops and I'm curious to see how they treat these. I remember seeing only a very small number of Kickstarter products on their shelves, period.

I wonder if there are collaborations between local retailers who consider the "Retailer Only" pledges as a "Group Buy" or multi-pack of games with the cost split up among the participants.

Also, I am curious to know if the "Retail Only" pledges tend to come along after a roaring success is assured (and shelf space is required when the pledge is fulfilled), as opposed to a retailer choosing that pledge level early on in a campaign, when they're speculating on whether or not the shelf space is required next quarter, year, etc.

I wonder if a retailer could find a way to dedicate shelf-space for "Kickstarter Exclusives" featuring tabletop games, like they could for comic books, graphic novels, or video games.

Soulfinger
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Well, to start with, in a

Well, to start with, in a traditional distribution chain, the Manufacturer sells to a Distributor at a 70% or so markdown. The Distributor then sells to the Retailer with a discount ranging between 40 and 50% depending on sales volume. These figures vary depending on the market, but it should be accurate for most tabletop products. You'll want to plan around that when determining your pricing scheme and factoring for future economy of scale (how many copies do you need to produce to drop your price point under 30% of MSRP).

Personally, I don't think that KS backers overlap with retail buyers. FLGS buyers like to kick the tires and inspect the physical product or they'd just be buying online anyway. KS backers are willing to throw money after farts and fairy dust if you promise enough stretch goals. Someone buying at an FLGS is more likely to play it in public, and your game's presence in-store is free signage. The only people I know of who say "I'll buy it at retail" are cynics like me who know that most KS releases end up in the discount bin or on deep discount online, and therefore wait to see if the $100 boxed sets will prove to be another $29 Sedition Wars. If you don't want people to buy it at retail, don't charge retail, which you shouldn't be doing to begin with.

Selling to retailers is putting your foot in the door and founding relationships for future sales. This matters tremendously if your KS is the start of a sustainable business. It is immaterial, if this is a one-hit-wonder offering with no future product support or if your pricing can only support direct sales. You should be able to see the inherent value in networking. Add to that, your backer plays with friends, those friends want a copy, they buy retail, a community grows, which drives sales, which leads to restocking. Small titles thrive on these microcosms of "At my FLGS we play 'Game You've Never Heard of'".

As I see it, you should be so lucky if any retailers even notice your game, even more so if you win the beauty pageant and earn shelf space alongside the proven sellers. Don't make it out like a debate over whether you want herpes. If 70 retailers back your game then you're the prettiest girl at the prom.

The following link is good reading, but most particularly in the comment section it suggests dealing with retailers separately outside of the KS proper, which eliminates your worry about bulk orders:
http://stonemaiergames.com/kickstarter-lesson-8-reward-levels/

adversitygames
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Soulfinger wrote:You'll want

Soulfinger wrote:
You'll want to plan around that when determining your pricing scheme and factoring for future economy of scale (how many copies do you need to produce to drop your price point under 30% of MSRP).

I don't get what you're saying here. How would I get the price point to 30% MSRP? I don't think you're using "price point" correctly?
(I'm really hesitant to say that because you normally seem to be very accurate but I can't work out what else you could mean)

I have a hunch that you mean average cost? If I'm wrong, ignore this part. So I'm currently looking at a average cost of about 49% MSRP for 1000 copies. With 2000 copies it's down to 40%. I'd have to produce *thousands* to get it to 30% - though that would be great if I get that much backing, I'm not going to bank on it.

Soulfinger wrote:
Personally, I don't think that KS backers overlap with retail buyers. FLGS buyers like to kick the tires and inspect the physical product or they'd just be buying online anyway.

Good point, agreed.

Soulfinger wrote:
If you don't want people to buy it at retail, don't charge retail, which you shouldn't be doing to begin with.

I'm currently looking at charging MSRP on the basic pledge, but that will be *with* free shipping. So essentially yes I'm charging less than MSRP.

Soulfinger wrote:
As I see it, you should be so lucky if any retailers even notice your game, even more so if you win the beauty pageant and earn shelf space alongside the proven sellers. Don't make it out like a debate over whether you want herpes. If 70 retailers back your game then you're the prettiest girl at the prom.

Hah. Right. But in terms of KS backing, it would be a *disaster* if I *only* got 70 retail backers (unless I specifically balanced the goal for that). I'm just looking at extreme cases and how the numbers would go (badly) to illustrate the financial problem of retail pledge levels.

I'm not seriously considering the idea that I might get 70 retail backers and no others - if for some reason I had 70 retail backers, the appeal of the game would surely get a ton of regular backers too.

Soulfinger wrote:
The following link is good reading, but most particularly in the comment section it suggests dealing with retailers separately outside of the KS proper, which eliminates your worry about bulk orders:
http://stonemaiergames.com/kickstarter-lesson-8-reward-levels/

Ah thank you. I had read the post, but hadn't gone through the comments section before. Interesting point on organising FLGS sales separately, I think I'll go with that.

Another problem I found with retail pledge levels is that it muddles up the pledges, which I think makes it appear a bit confusing. For example:
Basic pledge £40
Bonus pledge £60
Super-bonus pledge £100
Retail pledge £150
Super-special-bonus pledge £200
Super retail pledge £240

You get the retail pledges breaking up the non-retail pledges, making it harder for both types of backer to find the relevant info.

Soulfinger
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iamseph wrote:Soulfinger

iamseph wrote:
Soulfinger wrote:
You'll want to plan around that when determining your pricing scheme and factoring for future economy of scale (how many copies do you need to produce to drop your price point under 30% of MSRP).

I don't get what you're saying here. How would I get the price point to 30% MSRP? I don't think you're using "price point" correctly?
(I'm really hesitant to say that because you normally seem to be very accurate but I can't work out what else you could mean)

Sorry. It should have read along the lines of your price point accommodating said markdown, not dropping the actual price. As I understand it, a price point is the price set by the manufacturer of a product, but it is more of a fluid concept than MSRP in that it is adjusted to account for the market and competition (so the price point of a $10 MSRP item with a 20% off sticker on it is $8). So, poorly phrased on my part, but remember, I usually write my posts while I'm pooping.

Anyways, so it's like today when I went to Target and saw Cards Against Humanity practically sold out and retailing for $25. Who know what their actual terms are, but my rule of thumb assumption is that Target is paying $7.5/copy for the game. This works out to (MSRP - 70%) - Cost of Goods = Manufacturer's Profit Margin. Will you ever be selling that many games? Maybe not, but I certainly never expected to see Cards Against Humanity at Target. I'd be curious to know how much volume a game distributor like Alliance shifts and what their exact terms are for manufacturers. It's better to plot your prices in advance than to have to announce "We're selling our games to retailers through a distributor, so the price is going up $5."

Here's a pretty handy article on all of that:
https://www.nuvonium.com/blog/view/how-to-price-your-product-for-retail-...

Actually, this is one of those "everyone on this site should read this" sort of overviews, or rather, everyone should know at least this much if they want to self-publish.

The separate sales for retailers really should solve all of your problems. I hope you are giving great stretch goals though, because free shipping is crap. That's just what the consumer is trained to expect anymore (thanks Amazon and eBay). It feels like a lot from the retailer perspective (and it is), but customers rarely see it as value added -- in fact, you'll still have international customers bitching that it isn't free for them. Very few people seem to understand how the postal service works or know current rates.

ElKobold
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Soulfinger wrote: Here's a

Soulfinger wrote:

Here's a pretty handy article on all of that:
https://www.nuvonium.com/blog/view/how-to-price-your-product-for-retail-distributor-and-direct-to-consumer-sal

Great article!

It sort of illustrates why most small KS games can't really offer "retail pledge". Since the manufactured cost is already super high and close to cost of goods due to limited print runs.

adversitygames
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Soulfinger wrote:iamseph

Soulfinger wrote:
iamseph wrote:
Soulfinger wrote:
You'll want to plan around that when determining your pricing scheme and factoring for future economy of scale (how many copies do you need to produce to drop your price point under 30% of MSRP).

I don't get what you're saying here. How would I get the price point to 30% MSRP? I don't think you're using "price point" correctly?
(I'm really hesitant to say that because you normally seem to be very accurate but I can't work out what else you could mean)

Sorry. It should have read along the lines of your price point accommodating said markdown, not dropping the actual price. As I understand it, a price point is the price set by the manufacturer of a product, but it is more of a fluid concept than MSRP in that it is adjusted to account for the market and competition (so the price point of a $10 MSRP item with a 20% off sticker on it is $8).

I don't think it's down to the manufacturer (that's the MSRP?) though a manufacturer may have a good idea what a good price point is. Price points are the points of optimal profit (as sales vary with price, so it's the price at which (sales)*(profit per sale) is highest). These can vary for a lot of reasons, and yes like your example whenever a seller puts something on sale they are aiming for a price point that is below MSRP.

Soulfinger wrote:
Here's a pretty handy article on all of that:
https://www.nuvonium.com/blog/view/how-to-price-your-product-for-retail-distributor-and-direct-to-consumer-sal

Ah that brought up some good points, such as thinking about the COG directly. I'd kind of been looking at manufacturing costs and handling/shipping costs separately, and keeping track of the two numbers for everything. But it would be easier overall to just know the COG for each channel (for individual sale, for small volumes eg retailers and for large volumes eg wholesalers (...it might happen), with all the different costs)

Soulfinger wrote:
The separate sales for retailers really should solve all of your problems. I hope you are giving great stretch goals though, because free shipping is crap. That's just what the consumer is trained to expect anymore (thanks Amazon and eBay). It feels like a lot from the retailer perspective (and it is), but customers rarely see it as value added -- in fact, you'll still have international customers bitching that it isn't free for them. Very few people seem to understand how the postal service works or know current rates.

I will be posting up a link to my draft KS page in the coming couple of weeks. Currently working on ideas for the stretch goals.

It's tough coming up with some that are both appealing and don't compromise my game in some way (I don't want to offer "high quality" because I don't want to produce *at all* if it's "low quality")
I am currently playing with the idea of doing bonus extra cards + prints of the artwork

I've got a couple of stretch goals for long-terms stuff. Like at certain funding targets, an expansion pack will be funded and put into production next - and all backers at a certain level or more will get it for free.

I'm currently considering not even bothering with international sales at all, just focusing on US and EU with free shipping for all.
(*maybe* I'll include canada and australia too)

ElKobold
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iamseph wrote:I don't want to

iamseph wrote:
I don't want to offer "high quality" because I don't want to produce *at all* if it's "low quality".

Have you contacted a manufacturer already?
Simply looking at their quote might give you some ideas for stretch goals.

There are many things where you can alter the quality of components and it won't be strictly "better" or "worse".

For example, if you want cards without the black borders, it will cost extra.

Cardboard for the tokens will be different in price, depending on the thickness etc.

Expansions as stretch goals are tricky, since you can't do them in small increments (and that is what you want from your stretch goals).
What might work well for CMON, might not work for you.

adversitygames
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ElKobold wrote:iamseph

ElKobold wrote:
iamseph wrote:
I don't want to offer "high quality" because I don't want to produce *at all* if it's "low quality".

Have you contacted a manufacturer already?
Simply looking at their quote might give you some ideas for stretch goals.

There are many things where you can alter the quality of components and it won't be strictly "better" or "worse".

For example, if you want cards without the black borders, it will cost extra.

Cardboard for the tokens will be different in price, depending on the thickness etc.

Expansions as stretch goals are tricky, since you can't do them in small increments (and that is what you want from your stretch goals).
What might work well for CMON, might not work for you.

Yes there are a couple of little things I could do for the game as stretch goals eg I could go with black core playing cards instead of C2S. I don't think that's necessary for the quality to be good, since the cards are full colour there's not much danger of seeing through them, but black core would give them added endurance.

Another thing I could do is add some extra cards in to all the games, I'm kind of ambivalent about this, but... I actually have a ton of extra content (enough for 4 expansion packs, at least) so including some of that wouldn't be hard. I don't really anticipate running out of things I could add. So maybe I should just get over by ambivalence there and do it.

Yes the expansion pack stretch goals would each come to a gap of about £10,000.

I'm going to be including stretch goals (locked until they're closer) up to £150,000 - filling *all* of that with small stretches will be a nightmare (both in terms of the work preparing them, and the logistics of fulfilling them).

But I guess the small increments are of most value at the beginning anyway? So include them first, then the bigger expansion-level stretch goals, so I could exponentially increase the targets of the stretch goals as the funding gets bigger. So eg fund at £20k, stretch goals at £22k, £25k, £30k, £40k, £60k, £90k, £120k, £150k, etc... (just pulling numbers out of the air to illustrate my point)

ElKobold
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This is exactly the reason

This is exactly the reason why you shouldn't reveal all your stretch goals right from the start.

Let's say you have a goal of 20K. And let's assume a bad scenario, where you don't fund in the first two days. And let's assume you have a 10K interval till the next stretch-goal. Backers might get a feeling that they won't reach it and this may lead to dropped pledges. So you want that first goal to have a relatively short step. Maybe 2K or something.

Now the other outcome is also possible, where you fund instantly and open this small stretch-goal in the first day. But now when you know the actual pace of your campaign, you can set the correct intervals for the following stretch-goals, so that they feel achievable and you don't get 5 of them unlocked every day :)

I assume the campaign is for the Nightlancer? What basic pledge amount and goal do you have in mind?

adversitygames
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Yes this is for

Yes this is for Nightlancer.

The basic pledge to get the game is £40 (shipping included).
My basic goal is £20,000.

Yeah... this is gonna be tough.

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