GW Haters are Hating GW!

I've read the same articles as you, the same blogs as you, the same forums as you, and I've been around long enough to be surprised when something that GW does actually - er - surprises me. The last week of business announcements, for example; resin releases with simultaneous price increases, countrywide embargoes for online retailers, etc., has certainly been an aggressive set of moves.

Overall it looks like they are pulling a money grab, and putting the screws to us, the consumers. Looks like. But is that what is really going on?


Let's forget (if we can) for a moment that we're going to be paying more for our plastic crack goodies. A lot more. Ugh. Right, let's forget that. Let's focus on the fact that GW is, first and foremost, a business. A publicly-traded company, at that. They are profitable and solid. As an investor, they aren't a bad choice; they have a history of making good business decisions, regardless of your opinion on some of their actions.

The sole rule of capitalism is "Whatever the market will bear." In that regard, GW is doing what any company would do when they find their cash cow being threatened. GW has always had a tricky relationship with online stores. From my perspective, the online store sells the models, but it's the brick-and-mortar FLGS' that actually sell the product.

An online seller can't host a tournament, can't walk you through the product line and ask questions or make recommendations to a new user about what army and what units to buy. The FLGS is the heart of GW's business. They have already reduced their own workforce to keep costs low. They have to protect the brick-and-mortar game stores because they are the entry point for new customers.

See, there's this thing called commoditization; it's what happens when you start selling things in bulk. The sole selling point for a commoditized product is price; the guy with the lowest price wins. The guy with the lowest price, in this case, would be the online seller. It's great for the customer, but bad for the business, because all of a sudden your margin starts shrinking.

Say you have a choice between selling 1,000 units of a product at 50 bucks each, or 100,000 units of a product at 5 bucks each? Which would you choose? Keeping the volume lower and price higher forces you to maintain a higher quality product but you're only shipping 1000 units; less workforce required, less shipping cost, less tariff costs, less expenses overall. Your margin stays high and your stockholders (and the board of directors) stays happy.

The increase of prices on the new resin models does indeed reflect an attempt to increase their profit margin. I don't really have a problem with that, if it means I'll be able to do more conversions without breathing metal dust and scorching my fingers on hot lead. More glue less pin.

The increase on retail pricing, however, does mystify me. Particularly the increases in Australia. I'm sure there's a reason for it, I just don't know what it is.

These price changes affect me less than some others, true. I've got three armies cooling their heels at home, two of them being pretty massive. My future investments will be minimal, so I will be limited to buying new rules editions or codices (until something really cool comes out). But when I do I'm sure I will be outraged.

What are your thoughts on this? Good Business Sense or no?