Monday, January 11

Incentives

In my last quarterly newsletter I did a special deal for subscribers where they got to buy my games at a discount price. There were a few takers, but not a huge number - there's only four hundred or so people on my newsletter mailing list, and most of them already own one or more of my games.

At the moment I'm running another incentive: free shipping on all my games (but not the Sumeria Expansion) when bought from my website - regardless of where I'm shipping the games.

Incentives like these seem pretty harmless - I get a bit less money than selling at full price, and the customer gets it a bit cheaper than full price plus shipping. However, it's not quite that simple.

I've already agreed to sell my games to a bunch of shops and distributors. Those shops and distributors want to sell my games in their backyard, and due to their nature they will be much better at it than I am: A game shop in Lancaster, PA will have a much better idea of who in Lancaster, PA buys board games than I do, and far more people there will know about the local game store than my website. So I want to keep them as customers, and support them however I can.

The shops and distributors that have bought from me have invested their money in buying my games in the hope that they can sell them on at a profit. If I invite a few select people to get the games cheap from me, that's not really any skin off their back - those people were unlikely to buy from them anyway. In fact, as more people get my games and play them, the awareness of my games increases and it might even lead to more people interested in my games and more sales for my stockists.

If, however, I start undercutting them and making a big splash about it, then it might drive some of their customers who would have bought my games from them to buy them from me instead. That's not playing nice. Instead of supporting them in return for buying my stock, I'm hurting them. In that situation they'd be unlikely to buy more of my stock - leading to fewer sales overall.

There are some places in the world where I've got pretty good distribution: the UK, the US, and a chunk of mainland Europe. Similarly, there are a bunch of places where it's really hard to get hold of my games: Australia, New Zealand, Africa and South America. The free shipping deal was designed to help those hard to reach customers, while having minimum impact on my stockists in the well-supplied regions.

So far, it seems to be working, only one of the orders I've received since starting the deal came from a country where I've got good distribution, the rest came from those hard-to-reach countries - people who probably wouldn't have bought my games otherwise.

So I've sold a few extra games to people who were unlikely to get them otherwise; some people who wanted my games but couldn't afford full price plus shipping got them and the shops that stock them didn't get screwed. All sounds good.

The downside is that I really don't make much money on these copies. For example a sale of Sumeria (plus the expansion) to New Zealand gets me £25. £3.72 of that goes to the tax man as VAT. £1.18 goes to PayPal. £8.81 goes to the Post Office. £0.58 goes to Staples for the packaging. I'm left with £10.71. Still, it's more than I'd get selling to a distributor, and it's money I wouldn't have got without the incentive.

9 comments:

pjz said...

Don't worry about 'how much' once you can pay for sandwiches; after that, anything you leave on the table becomes goodwill and good word-of-mouth marketing.

Mal said...

One thing I'm surprised you didn't mention is that that £10.71 is far from pure profit. There's a good chunk of it going toward the game's manufacture. And when you consider how much time it took you to do all the work involved in the offer (including walks to/from the post office), I'd imagine it's well below minimum wage.

Not meaning to put a downer on things, but it's too easy to read your last paragraph as a profit calculation and deduce that it's a tidy sum. :)

Jack said...

Hiya PJZ:

Yes, funding some food would be nice :)

Mal:
Yup, that's not all profit - the cost of the game and my time both have to come out of that.

Cheers,

Jack

Sound Strategy said...

Don't worry about undercutting the distributors at this point. You need to get mouths blabbing about your games, first and foremost.

For the same counter-intuitive reason that like stores do better when they cluster together, your distributors will actually benefit if you do deals like this at your stage of development, especially if these are only short, intermittent specials.

Jack said...

Hiya SS,

That was my thoughts exactly, I'm hoping a few extra sales and the publicity will help, and the limited time offer won't hurt my retailers much, if at all.

Cheers,

Jack

Hulken said...

Hi!

How is youre sales going, how manny games do you got left of the printruns? (confurmed and unconfurmed)

/Daniel

Jack said...

Hiya Daniel,

Sales are going ok, 60% of It's Alive! has sold in 16 months, 49% of Carpe Astra in 15 months and 36% of Sumeria in 7 months.

I need to step up sales if the company is going to get off the ground, hence investing the time in contacting US shops.

Cheers,

Jack

Hulken said...

Ah ok well those number look good (atleast to me =)

So you should be braking even on most of the titles right around now, unless you got really bad margins.

Keep us posted on how it goes with the shops in the US.

Jack said...

Hiya Daniel,

As I've mentioned before, the margins on It's Alive! were bad, so I'm still a way of breaking even on that, the others are a similar distance away.

Cheers,

Jack