Wednesday, 16 October 2013

Price vs Choice

In case you haven't gathered from previous posts I'm a pretty big proponent of FLGS' and RRP pricing for products.  This isn't just for tabletop games, this is in general.

Why?
Well I'm keen to support brick & mortar retailers, even "big box" retailers who in some respects get a bad rep.  Plus, I rarely buy anything online.  In fact the most recent thing I bought online was some ink for my printer and that's only because I have an uncommon printer (apparently) which means I can't simply pop into PC World or similar to pick up some new ink.  Oh and I don't buy "compatible" inks because I've never found them to be all that compatible...

But why pay more?
That's not the question.  The question is "Why pay less than what the product is worth?"
Recommended Retail Price (RRP) is there for a reason.  It provides a breakdown in price for a product that enables each layer of the manufacturer/distributor/retailer to make money.

Just think of how many more games you could buy though if you paid less!
That doesn't stack up for me.  On a £40 board game I could save what, £4? Maybe even £8 if I really wanted to support a deep discounting online only business.  But then all sorts of things happen.

My FLGS (or equivalent retailer of something other than games) loses the sale which in turn impacts on their ability to make money which in turn (given sufficient volume) impacts on their ability to remain in existence.

Yeah but what does that matter?  I mean you get all of those services from an online retailer, right? I'm going to go with "No" on that one...

There's a recent news article on a situation in France in relation to "independent book stores" which helps to highlight this a bit for me.  In simple terms Amazon (not their biggest fan but that's verging on a discussion about tax and politics...) are in a very different market in France compared to other countries when it comes to books.  This is because France limits the amount of discount off RRP that an independent bookshop can apply to a product to 5% OR supply free shipping.  This limit is being applied to Amazon as it does to every other retailer.

Amazon's argument is that this impacts on consumer choice.  Which I kind of half buy into after all having choice is key to any consumer based decision making.  Oh but wait. Amazon's only talking about a price based choice...
My (and from what I can tell the French government's) counter argument is something along the lines of "By limiting the pricing discount options on products we protect the existence of consumer choice of retailer."  Or in other words it levels the playing field for ALL retailers and enables the consumer to make the decision based on factors other than price alone.

But companies making a profit is bad!
Wrong.  Companies not making a profit go out of business.  The only exceptions to this are high volume companies who likely still don't make a profit, have benefactors who bankroll them or have questionable (at least morally) tax regimes...  Stepping away from the tax topic...

Imagine your employer makes it corporate policy to reduce their profit margin.  Will they still be able to pay you the same salary with the same benefits?

Think of this another way (and to paraphrase Gary Ray of Black Diamond Games) -
Don't discount = Have resources to grow.
Don't cheat customers = Customer growth.
Hire good people and pay them well = They grow the business.

It's not rocket science, it's offering a great customer experience which in turn enables your business to grow because your customers are happy to pay RRP.  Note I say "pay RRP" not "pay more".  It's only more if you inflate your prices.  RRP is NOT price inflation, it's THE price.

Anyway... I'm putting my soapbox away for now.