A Little Bit of a Rant About Pricing

I've been into miniature wargaming for about 10 years now and the one thing that has been a constant throughout those years is complaining about prices. I've begun to think that a miniature wargamer would complain about the price of a figure if they were given it for free.

As I approach my time of leaving from the military, I've been working on a business degree and have tossed around a few ideas in my head for turning a few bucks on the side. Of the things I've learned, probably the most important is that if you don't make enough money, you go out of business. Businesses make money by selling goods or services. I know, I know, none of this is real earthshaking never been exposed before kind of information. However, it is a basic fact that I think wargamers have forgotten when they browse the webstores. They have forgotten that the companies (even the garage shops) don't make the figures as a favor to them, they do it because they want to make some money. At the start they tend to do it because they enjoy it, but after a while it comes down to the bottom line, even if they still enjoy the actual making and using of the figures. If they aren't covering costs then they are losing money. If they are just covering costs or a little more than, then they are where they started at the outset with no real gain. For some that might be OK, but if you started a business then you probably had some intent to make a profit.

GASP!!! He said the "P" word!!!!!!

Companies that make profits are Evil! (Said the people who are using several products and services from companies that they approve of that made a profit on them.) No, companies that make a profit are successful, not evil. Companies have expenses just like we do, utilities, rent/mortgage, paying employees, insurances of various sorts, contracts (if they are outsourcing parts of their operation), materials, licensing (if using someone else's IP), etc and so forth. So they set their prices to account for these things. Then the miniature wargamers complain that the figures are so much more expensive than when they could pick up a platoon for 5 cents at Woolworth's when they were a kid. Well, first off, there is this thing called "inflation" that makes things more expensive. Second, if the company doesn't set their prices at a point where sales income is greater than operating costs then there won't be a company that makes your precious (insert niche period/genre that has 10 gamers worldwide) anymore. There's a balancing act that has to occur, because the price at which something will sell is generally (in non-command economies) set by what the market will bear, meaning what people are willing to pay for that product or service. If they think it's too high they won't buy, so the company has to find the sweet spot where people buy their product/service at a fairly constant rate but high enough for them to cover costs and make some profit to be used to develop the company. Oh, and in the majority of small businesses, what's left of the profit after development is the owner's income. So no profit, no income for the owner, his kids go to bed hungry.

I think part of the problem is that the companies producing the majority of figure producers out there don't value their time correctly. They treat the business as an extension of their hobby. So when they hear complaints about price they set their prices lower, but this doesn't reduce their materials or other costs, so this comes out of the price they place on their development and production time. If this were priced more accurately figures would be more expensive. Here's another part of the problem though, they are trying to compete with larger companies that by way of economy of scale can sell higher quality product at lower prices. This is hard to compete with as a small producer and there is no easy solution. So the small producer keeps their prices low to be competitive. And the wargamers still complain that the prices are too high. Then the company goes out of business because they set the price point too low to sustain long term operation. Then the gamers complain that the figures aren't available anymore.

What has brought all this on is the complaints about X-Wing's price. Yeah, the starter is $40. Here's the deal, George Lucas is no idiot. The ability to produce anything under license for Star Wars is very expensive because there continues to be a high demand for Star Wars stuff. For that $40 you get three quality figures that don't need to be painted, a game that you can start playing within five minutes of opening the box, and high quality components. Like most companies I don't think FFG is trying to gouge anyone, they're trying to find that sweet spot between where people will buy the product and where they make some profit. I understand that especially now people don't have as much money to throw at their hobbies, but don't begrudge a company for what is most likely a fair price and operating as a business.  There are some cases where I think companies have set their prices unreasonably high. We all know who they are. But some are just trying to cover costs. Infinity is a good example of expensive, but fairly priced figures. I would love to buy some Infinity figures, but the price point on their product is too high for me to get into without having somebody around here to play with. Why is their price so high? Taxes and import expenses. Infinity is made in Spain, so they have to deal with the EU's VAT and then there's the expenses involved to export, then for the distrubutor's to import the product. All this is wrapped up in the price, so while they are expensive (and in my estimation high quality) figures, I don't think they are unfairly priced.

I'm probably not making any sense as I just sat down and started typing without any kind of outline or preconceived idea of how I was going to present all of this. Ultimately I guess I just wanted to say that value is subjective, but production costs are not. Most companies aren't gouging you, so stop your complaining. If you can't afford it, I'm sorry, I really am, but that just means you need to explore other avenues of legally obtaining the product.

Yes, I realize that what I'm advocating is higher prices for figures I like, but to be honest, I'm OK with that if it promotes healthier businesses that would be around long enough for me to buy the figures.


TamsinP said...

I totally agree about pricing - it has to be realistic for the producers to survive as a business and continue producing the miniatures/rules/bits&bobs we want to buy. Yes, there are some companies out there who do seem to be gouging their customers, but the fact that they are able to do so and are still in business suggests that their pricing is only considered an issue by some of their customers.

One comment regarding your comments about the cost of Infinity. VAT isn't paid on goods exported outside of the EU, however the buyer/importer would be liable for any local sales taxes and import duties when the goods pass through customs in the destination country.

Sergeant Crunch said...

Wouldn't they have to pay VAT on their raw materials used to make the figures though?

Dan said...

The only company I ever had a real problem with the cost of their figure is GW, but their costs are really only 1 problem of several I have with that company, so its more like the straw that broke the camels back, and won't buy from them anymore, I am happy to buy from most other companies and pay what ever their asking price, if I need or want their figures, however, company A has similar products to company B they need to be competitive with their pricing, because price will play a factor when deciding who's products I buy.