Author Topic: RETAILERS  (Read 11129 times)

Offline libertee

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RETAILERS
« on: August 17, 2010, 09:55:36 AM »
This is a topic broached a few times over the years but never actually answered fully in one place. 

 I very often get emails from customers asking about why we dont use many retailers.  I also get emails from retailers asking to stock us, but we quite often decline.

I thought i would list some of the thinking around this topic here and also invite you guys to give your opinions/perceptions. As usual i will answer as honestly as i can.


PLUS SIDE TO USING RETAILERS


1:  You obviously shift more stock long term.
2:  Each time a retailer cross-links and sells a HF product to someone who hast come across us before it generates a potential future sale if that customer is happy.
3:  We benefit indirectly from their advertising.



NEGATIVE SIDE TO USING RETAILERS


1:  The dreaded bottom line.  The deal we offer retailers is 40% off RRP.  We think this is pretty generous as, for example, they get to buy a 3.00 figure in for 1.80 and sell it for 3.00 making 1.20 profit on it.
2:  We reimburse retailers their shipping costs in free figures so if shipping their order comes to 12.00 we give them a minimum of 12 RRP worth of stock free.



However we get retailers ( alot of them) telling us that they want 50% , 60% or even 70% off RRP before they will stock us. We then have to deal sometimes with some quite agressive retailers who arent happy that we have said"no" to this.  Yes we know they have running costs too, but they dont have the manufacturing costs that we do ... remember they get supplied with a finished product all packed nicely and ready to sell.


This is how we explain it to them.

"If we sell you a 3.00 figure for 1.80 you make a potential 1.20 profit on that figure.  Technically we get 1.80.  But is that profit?....course not!!"

For that 1.80 per figure that we get we have to pay

1: moulding/casting costs, metalprices have risen again as have rubber prices so the price we pay per figure is going up again.  If you assume that 1 casting bought in costs 80p that just leaves 1 'profit'. 

however this 1 'profit ' has to pay the following.....
2: sculpting costs (even Kev has to get paid occassionally you know, love doesnt pay the mortgage!). 
3: staff wages at all stages from mould allocation through to shipping to caster, sorting the figures, quality control, packing the production castings, labelling the production castings,
4: Stock storage
5: postage costs to and from the caster for green, masters & production castings.
6: finance charges for processing the transaction

Cumulatively also the little profit we then make goes toward the running costs of the unit...rental, power, utilities, equipment, paper, bags,...basically everything needed in a day to day form.


If we drop our bottom line we cant afford to run, we will be to all intents and purposes just giving our stock away....doing all of the work so someone else can profit.

Is that fair?....i dont think so and i have 4 kids that don't think so either!



I can hear some of you saying "arent the potential gains from one of the larger retailers stocking your products at a lower rate going to help long-term?"

You would think so, wouldnt you.  However, on the order form we invite customers to let us know how they have heard of us.  The majority of comments arent retailer based but through word of mouth and forums.

We do supply 2 larger retailers (no names mentioned .. one UK and one US) at a lower rate of 50% discount.  I have worked out (time and motion study) that if one of them places an order for 1000 RRP worth of stock (they pay 500), once all of the charges. labour etc are covered in processing that order we actually physically make on average approximately 18p per figure (small figures with lower retail price like Katie, Sarah, Little bits we make a loss and larger pieces like the multi-part adventurers we make a bit more profit...it balances itself out.  However if their 1000 RRP worth of stock is mainly low value items we make a loss for that complete order).   So on average thats 6% of the RRP in 'profit' which then goes towards running costs above.  So we are giving the stock away. They get 50% per figure to play with for their running costs and we get 6%.   This is called a 'loss leader' and apparrently lots of major retailers do this.  Long term we hope that the gains of supplying them ...some of their customers coming over to us direct, benefit from their advertising etc will even this out a bit more in our favour.



So next time someone wants to badger us about selling at a lower than current discount, please point them to this topic first!  We do have a right to make a profit, we arent just here to supply the industry with funky toys for the hell of it!
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Offline AKULA

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Re: RETAILERS
« Reply #1 on: August 17, 2010, 10:11:35 AM »
 :applause:

Well said Sally

From conversations with other firms (no names mentioned), not just in our hobby, it is amazing how many companies don't know what their bottom-line is, and its reassuring to understand how well-run HF is. 

Although its slightly off-topic, it also shows the plusses and minuses of commission work vs HF sculpts - ie a one-off lump sum, but no trail income, versus a long-term stream of income, but with no cake upfront.  As much as everyone on the FoD are always keen to see new HF greens, commission work has its part as well.

Offline dwartist

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Re: RETAILERS
« Reply #2 on: August 17, 2010, 10:21:29 AM »
Personally I would sooner buy 'over the counter' from you. Having been a customer for a little while now and conversed with your good selves and the other 'regular visitors' on numerous occasions I am more than happy to wait (although I never experienced any unreasonable delays on orders) for my goodies in return for the irreplaceable intimacy of our 'shop'.

Offline agentmolar

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Re: RETAILERS
« Reply #3 on: August 17, 2010, 03:29:21 PM »
I only buy hasslefree direct. I prefer all the profits going to you guys.

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Re: RETAILERS
« Reply #4 on: August 17, 2010, 04:24:44 PM »
 :metoo: Absolutely!

Offline Brandlin

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Re: RETAILERS
« Reply #5 on: August 17, 2010, 04:45:49 PM »
i'm actually surprised you use ANY retailers in that market.

I can understand the need to have say a US distributor, but i'm amazed you have any in europe let alone the UK.

I think you have a business model well grounded in outstanding customer service, openness and approachability and half decent sculpts ;) Its you who make that service - not some third party distributor. And in this day and age don't most of us get our miniature fix and news and such like from the web? So in the UK and to a lesser extent europe i'd be surprised if there is more than a couple of percent of your revenue which does not come on line?

You guys know the business better than I do, so i'm not challenging your assumptions, just expressing my surprise.
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Offline Dagenhameast

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Re: RETAILERS
« Reply #6 on: August 17, 2010, 04:47:17 PM »
However we get retailers ( alot of them) telling us that they want 50% , 60% or even 70% off RRP before they will stock us.

Just be glad you don't have to deal with Amazon... thankfully forum rules prevent me from saying what I think about that shower :|

Offline gi6ers

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Re: RETAILERS
« Reply #7 on: August 17, 2010, 06:11:00 PM »
retailers are probably more useful to younger companies looking to get visibility.  Asking for 50% is ridiculous in a low margin industry.

Offline Mrephunk

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Re: RETAILERS
« Reply #8 on: August 17, 2010, 06:22:21 PM »
I buy direct from you, happy to see you reap all the benefits of a profit. But I didn't at first. My first order was from a US retailer who had your items in stock. I had never seen your stuff previously and was blown away at what they had in stock. So I went directly to the source and after finding out you are basically a Mom an Pop outfit I have since never ordered your products from anyone but you. But I must say that if I hadn't ever seen your awesome figures at that retailer I may have never found you before. Living in the US I was wary at first to purchase from overseas, with customs and longer ship times, as well as the extra charges I get from currency conversions. But after looking at your range and reading about your company I have only ordered your products from you. And doing so with much success has opened me up to order many more minis from other UK based manufacturers , Andy being one of them. So even though I totally agree and understand about your bottom line, some good did come from the fact that you stocked a US retailer tho. Now you have a very loyal customer who orders religiously from you and participates in your great FOD community and has also ordered from other FOD manufacturers because of you.
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Offline DRAGON

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Re: RETAILERS
« Reply #9 on: August 17, 2010, 07:44:29 PM »
I would probably buy the odd figure here and there if I saw it in a shop but I would much rather buy them direct from HF - then I know my money is going to a worthy cause !
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Offline Penfold

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Re: RETAILERS
« Reply #10 on: August 17, 2010, 08:58:02 PM »
For me personally there is only the one place to get Hasslefree and that is direct. Fast friendly service  :applause: keep up the excellent work
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Offline libertee

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Re: RETAILERS
« Reply #11 on: August 17, 2010, 09:29:58 PM »
i'm actually surprised you use ANY retailers in that market.

I can understand the need to have say a US distributor, but i'm amazed you have any in europe let alone the UK.

they are retailers rather than distributors......i can understand distributors wanting a higher cut as they have to then sell on to retailers who want to make a bit of profit as well...but retailers asking for 60% discount is pretty unbelievable

Quote
I think you have a business model well grounded in outstanding customer service, openness and approachability and half decent sculpts ;) Its you who make that service - not some third party distributor. And in this day and age don't most of us get our miniature fix and news and such like from the web? So in the UK and to a lesser extent europe i'd be surprised if there is more than a couple of percent of your revenue which does not come on line?

about 30% of sales by volume are through retailers right now

Quote
You guys know the business better than I do, so i'm not challenging your assumptions, just expressing my surprise.

Sometimes i think we dont know what we are doing...correction...'I' dont think i know what i am doing in this business.  Just when i think we have it sussed something else kicks us in the teeth and i have to try a different viewpoint,  I think i am just a good 'blagger'!!
   
i think it is about getting the mix right.  Some retailers, some freelance and lots of webwork.   It is easier and quicker for us to pack a bagged retailer order of say 300 rather than 10 web orders of 30 and earlier this year when i was unable on my own to keep up with web demand we had to shut the shop for a month and rely on retailer business to keep us going.
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most mornings i wake up grumpy.   sometimes i just let him sleep.

my life consists of brief snatched moments of living my life hidden deep among chaos, confusion& the  going crazy, every night i go to sleep filled with hope & enthusiasm for the new day coming.  then i wake up & think "here I go again" & just aim to survive.

Offline Brandlin

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Re: RETAILERS
« Reply #12 on: August 17, 2010, 10:32:57 PM »

Quote
i'd be surprised if there is more than a couple of percent of your revenue which does not come on line?

about 30% of sales by volume are through retailers right now


That's higher than i would have thought....

good to know that you know the figures though -s o many small outfits dont
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Offline libertee

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Re: RETAILERS
« Reply #13 on: August 17, 2010, 10:54:16 PM »

Quote
i'd be surprised if there is more than a couple of percent of your revenue which does not come on line?

about 30% of sales by volume are through retailers right now

That's higher than i would have thought....
good to know that you know the figures though -s o many small outfits dont

I have no problem in knowing the stats, i just dont like what they look like! ...lol!
A bank is a place where they lend you an umbrella in fair weather & ask for it back when it starts to rain. 

most mornings i wake up grumpy.   sometimes i just let him sleep.

my life consists of brief snatched moments of living my life hidden deep among chaos, confusion& the  going crazy, every night i go to sleep filled with hope & enthusiasm for the new day coming.  then i wake up & think "here I go again" & just aim to survive.

Offline somaticon

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Re: RETAILERS
« Reply #14 on: August 17, 2010, 11:40:37 PM »
I only buy direct from Hasslefree in fact I only buy direct from all the FOD companies. There are some ranges which it is impossible to buy except from a retailer. Its been a bad year for everyone heres hoping it picks up.
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Offline ixminis

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Re: RETAILERS
« Reply #15 on: August 18, 2010, 12:12:00 AM »
Very informative and why I tend to purchase direct from Hasslefree. I want y'all to be selling & making a profit for as long as you want to!

My understanding of loss leader is an item sold at less than cost to bring in the sales on the items that did generate profit. With the typical margin rates of miniatures, I would consider avoiding even that practice. For example, when I did work for large, LARGE companies with thousands of stores, we'd do our best to match a loss leader sale that had -5% to -25% margin with sales that gave us +50% through + 200% margins.

Yes sir, that nintendo with mario is a great deal; might I interest you in the strategy guide that <fill in blank based on customer preference> and you can play that game with 3 other people, do you have all the controllers you need?

I have trouble translating that to a figure manufacturer... but the bi-annual deals and FOD membership stuff is spot on.

You've got to make a profit and I fully fully fully support you doing so!!!
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Offline fog99uk

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Re: RETAILERS
« Reply #16 on: August 19, 2010, 08:59:44 PM »
Asking for up to 70% off the retail price is just taking the piss. I work in a models department and am responsible for all of the ordering so I know what trade prices usually are.

The standard trade prices are approx 2/3 of the retail price - so 33% off. As my work sells large amounts of stock we get discounts on almost all of the ranges we stock. The smallest of these is an extra 7.5% (total of 40.5% off retail). The largest of these is an extra 27.5% (total of 60.5% off retail).

These discounts are for ranges produced by very large, international manufacturers that we sell huge quantities of. For smaller companies like yourselves I wouldn't expect more than the standard 33% off retail.

Offline mcfonz

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Re: RETAILERS
« Reply #17 on: August 20, 2010, 09:22:09 PM »
I hate to say it but 'retailers' in terms of brick and mortar shops are going the way of the dodo - at the very least in the uk.

They worked once because of the relatively few miniature companies out there but now there are so many that it is actually just simpler for most people to go online and do orders.

This is a bit of a bold prediction but I reckon what will eventually happen is that you will have 'hobby' based shops which are net savvy and have arrangements with the manufacturers themselves which requires the shops name and customer number to be logged into the order form. They then get paid comission directly from the manufacturer for sales etc.

Its the only way I can see it happening in the future. As for various internet dealers - I expect them to bite the dust as well to a certain degree. The only reason they exist in the main is due to them being able to offer stuff cheaper.

GW realised that these dealers were getting something for nothing which is why they have introduced a new scheme when it comes to online retailers which means they don't get as much of a retailer discount as an actual local gaming store would. Personaly when it comes to the net I rather get stuff straight from the manufacturer in most cases.

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Offline fog99uk

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Re: RETAILERS
« Reply #18 on: August 20, 2010, 09:55:59 PM »
International manufacturers rely upon regional importers who can buy products in large quantities. This keeps the relative shipping costs low.

Take Tamiya for an example. They produce their models in Japan and ship them out in bulk to regional importers, who then sell the stock off to retailers (including online retailers). If you bought direct from Tamiya rather than from a retailer you'd have to fork out for international postage every time, and wait the time it takes for items to be shipped from Japan to the UK. For an average sized kit you'd be adding 10-15 in shipping.

For manufacturers who have a mainly national customer base it certainly is better to sell direct as they only need to charge national postage charges.

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Re: RETAILERS
« Reply #19 on: September 27, 2010, 03:04:10 AM »
When I first started buying minis, I bought from retailers maybe half of the time. I wasn't aware of how the cost differences worked out for manufacturers. These days I buy direct whenever feasible.

Hasslefree and Heresy are both really good. Even with the dollar/pound exchange rate, both come out to near enough the same cost (both per fig and for shipping) as buying from a US based dealer, and both have great CS. Of the major US based dealers I've purchased from, only one had similar quality CS (Rattlehead Games). There seem to be a lot of retailers out there who are good enough at basic order filling to have a good rep, but suck at dealing with CS issues. There's at least two big name "good" retailers who I will now only buy from as a last resort because of iffy past CS experiences.

That's not to say retailers don't have their place. There are unfortunately some manufacturers who's products I like, but will only buy through retailers because they're direct purchasing setup is in some way not worth it. Some charge bizarrely large amounts for even basic shipping, others use strange non-standard payment schemes, some require you to order via email, and some are simply unlucky enough to be in an area with an unreliable postal system (I ordered something from Italy-based Kabuki Models last week because I was too impatient to wait for the retailers to get it stocked. Wish me luck).

Offline Cultist of Sooty

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Re: RETAILERS
« Reply #20 on: October 20, 2011, 07:34:53 PM »
No high street shop ever gave me free sweeties with my miniatures. Enough said.

Offline dracon magis

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Re: RETAILERS
« Reply #21 on: November 13, 2011, 06:15:12 AM »
to me a retailer should only get 20% while a distributor should get 30% -40 %.  retailers sell the product and so oly have minimal overhead while you distributor manages many retailers and so would have more flow of product.

but hey thats business
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