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Thursday, December 23, 2010


Steve Cole explains:

I have had trouble explaining this concept before, and an article I put in the last Captain's Log just confused people. Ok, I'm going to try again. I have to explain some things about the industry, but I'll be as brief as I can be.

Retail game store owners are busy people (most game stores are single-owner/single-location things), and there are thousands of new game products each year. They cannot study each new product to see how it fits into their store and judge how it will sell; relying on wholesalers to educate them has failed since the retailers can't stay on the phone long enough. Worse, by the time the retailers fill most of the store with the top ten publishers, they have little space left for the other 90 hard-copy publishers (a random dozen of which share the last shelf unit, and the rest get ignored or considered to "pre-paid special order only" status). So, the retailers tend to buy what they know, by product line and by publisher.

Take ADB and (for example) Steve Jackson Games (which is literally ten times as big and run by a good friend of mine). SJG products are in every store; ADB products are in ten percent of stores, and have very little chance of ever cracking into the other 90% of stores. (There are a lot of things ADB could do to get into more stores, some of which actually work. We do all of the ones that work, and have tried most of the ones that don't work. We gain new stores at something a bit more than the rate existing stores go bankrupt, but that will take decades to get into 99% of the stores.)

Let's say both ADB and SJG produce an innovative new product designed to sell outside their current market. Say, Zombie Dice (a real product) and Star Fleet Rescue Dice (we designed it, but never manufactured it). Both of these are products with no history, no track record, and no comparison. No store can look at any other product and say that either of those new ones "will sell like that one did". Virtually every store buys products from Steve Jackson games, so when SJG produces such a new (unknown) product, every store takes some (usually an average of the number of other SJG products they buy). The same thing happens with such a new (unknown) product from ADB. The 90% of stores that do not carry ADB products do not even look at the "innovative new product that ADB did to sell beyond its current customer base" because they don't have time to look at new product lines (and SFRD gets lost among the hundred or so other products that came out that week). [This is why we decided not to invest money in SFRD and just turned it into a one-page free game in Captain's Log.]

Net result, Zombie Dice sells pretty well and Star Fleet Rescue Dice (if we had done it) would sell about ten percent as well (and we would have had thousands of dollars tied up in unsold inventory). Status quo. Nothing changes. ADB cannot get bigger. Again and again, we have done bold new innovative products designed to sell to gamers who don't buy SFB (e.g., SFBF, FC, Starmada) and, every single time, they sell mostly to stores that stocked SFB and -- net result -- sell only ten percent as well as they could or would if every store bought them.

I am not stupid. I know that SFB is a very complex game that only an elite section of humanity are (frankly) smart enough to play. I have heard perfectly intelligent retailers say "SFB is too complex, too plain, and too old to sell to my market." That's why we did the new products (e.g., SFBF, FC, Starmada) to appeal to people who don't play SFB, but these are products most stores never even thought about giving a chance. Those new products sell very well to both SFB players and non-SFB players. Who do they NOT sell to? To people who never see them because their stores don't even notice they exist, because those stores don't stock SFB and don't look at anything done by ADB. They have us (incorrectly) pegged as a company that does only complex, plain, old-style games.

So, what can we do about it?

A lot, not much of which actually works.

We have been to the GAMA Trade Show and have found that by the time you take the few retailers that show up (about 150 stores), deduct the ones that already carry our products (125 of them), and deduct the ones that refuse to even talk to us (about a dozen of those), that leaves about ten or twenty stores that will at least talk to us. Every time we go, we get five or ten of those (at a cost of several thousand dollars and two weeks of the company's time). It's a losing proposition and only a drop in the bucket. ADB needs to gain stores by the hundreds, not single digits.

ADB has spent a lot of money advertising, but the retailers ignore the ads. They don't ignore them because they are bad ads (they're actually quite good ads); they ignore them because (like most humans) they just don't pay much attention to most ads. (A few do, and these are the most successful retailers. Many of them pick up our product lines because of this, but at a cost of $300+ per retailer gained, it's not a workable business model.)

We could get in the car, drive to every retailer, take them out to lunch, show them our products, play a sample game or two, put on some demos, host a tournament, and gain retailers that way. I suspect that would cost a lot more money than we'd get out of the deal, and take a year or three, assuming we could average four or five stores a week. (Way back in the ancient days of the 70s and early 80s, there were half a dozen people, known as "reps", who made a living doing just exactly this, i.e., carrying with them the products of about ten game companies, and getting paid a bounty for every store they got to place an order. These "reps" went the way of the dinosaur a two decades ago.)

We do ask our gamers to go into stores and convince the owner to stock our products, and sometimes that works. Most of the store owners just say "I will order it for you" but they won't stock it where a NEW customer would see it. This might work if we could train our customers to be really first-rate professional salesmen, but that's hard to do by email, and even if we ran a seminar on how to do this at Origins, it might gain a dozen stores, at most, per year. Sigh.

We did mail the retailers something explaining our products, but they get so much advertising mail that most of them don't have time to read any of it.

We could mail stores a free product, but it wouldn't be much of a test, and most of them would just sell it and forget it.

The best success we ever had was to have Ken Burnside (and then Vanessa Clark) "cold call" stores and talk to them about our products. This worked for two reasons: Fed Commander was a hot new product (now, it's just "old news" to overstressed retailers) and the people making the call were born salesmen. We don't have anyone on staff who has the personality for this, and several attempts to hire outside salesmen on a commission or bounty basis have not worked (they want to be paid for effort, not results, and we cannot afford to pay for failed efforts, no matter how much effort was involved).

So, we press on. We're gaining, but it's a tough battle, because 90 other companies are doing the same thing to attract the attention of the same (shrinking) number of stores. We do ask (and appreciate) our customers trying to find new players, reactivate old players via Starlist, and get stores to carry our products. It all works, I just wish it worked a lot faster.