I thought I’d write a quick update on where we’re at with our ongoing review of website categories. It’s taking a bit longer than expected, but then it is a pretty big project.
We’re assessing each category based on a number of criteria. These include popularity, profitability, how it fits into our overall product mix, the amount of warehouse space it requires, supplier lead time, minimum order cost, whether there are any posting issues (e.g. solvents, or fragility) and how easy the supplier is to deal with. If we eliminate a category now, it doesn’t mean it won’t return, but in order to return we’d have to solve the reason why we’ve decided to drop it. The intention is to work hard on the website categories we keep to improve them. We believe it’s better to do a few things well than lots of things half-heartedly !
An overall result of the category analysis we’ve done is that it looks like we’ll be focusing the business quite more towards the modelling side of things, and away from the Gaming side. Quite simply, gaming products are widely sold, and have become a “commodity” product. We’re seeing people choose a seller based entirely on price. This has driven margins down to (in many cases) well under 5%. At that point, something has to give; either service has to slip, or you have to be a business which doesn’t need to make a profit. So we’ll be cutting gaming products down to only those which make a sensible (not greedy !) profit, plus those which directly support games we play ourselves.
For each category we decide to keep, there is a three-stage process.
– First, make the decision !
– Second, to calculate the correct stock level to hold and build it back to be consistently at that level, then set it up so we can more frequently review and update the correct stock level to reflect changing trends. To make best use of our capital, we’re keeping stock levels tight, and ordering from our suppliers more frequently. More of a “little and often” approach rather than trying to cover the rare cases where someone wants two dozen of a rare item we normally sell at the rate of three a year.
– Third, “gap fill” any products in the range we haven’t previously stocked, and keep up to date with new releases.
I won’t bore you with a list of every single category we’ve got (there are about 180 in total !), but here are the key ones;
Website Categories we’re keeping
Vallejo – we’ve rebuilt this up to correct stock levels, and have started “gap filling”, beginning with Model Air sets and the Pigment sets which replace the ones Vallejo discontinued.
Reaper Miniatures – we like Reaper, and like to think we do it well compared to our competitors (although we keep on top of monitoring what they’re up to !). Also, as avid D&D players, it supports one of the games we play ! Stock availability is much better now that we’re ordering little and often from Reaper. It has also reduced the number of problems we had with large orders getting stuck in Customs. We’ve been rapidly adding to the range we keep, including Dark Heaven Legends, Bones, Pathfinder and Warlord. We will create a new sub-category shortly for Savage Worlds.
AK Interactive – we’re working on rebuilding this up to correct stock levels, although the importer frequently runs out of things in the AK range. There will be a lot of “gap-filling” needed for AK Interactive products, so it’ll take time to do this !
Tamiya – the model-maker’s staple; high quality products, and a brilliant supplier to deal with. Sadly we can’t ship their aerosols (if we end up doing any local shows, we’ll probably be bringing our remaining stock of aerosols with us at great prices…). We’re considering making their full range of kits an “available to order” thing, if we can solve a few technical aspects within our website software.
Chessex Dice – again, a product which supports our love of Dungeons & Dragons ! Chessex are fabulous to deal with as a supplier. We’re in the process of rebuilding stock levels; in terms of gap-filling, we’ve got quite a few of their newer releases but need to take good photos of them before we can add them to our website. We also need to do quite a lot of work “prettifying” the existing Chessex sub-categories.
Javis Scenics – a really great UK supplier. We’ve built stock levels back up for key products in the range. There’s more work to do (as time and cashflow allow), and a lot of gap-filling to be done !
Frostgrave – although we’re stopping many tabletop gaming categories, Frostgrave is a game we like so much we’ll be keeping and developing it !
IHMN / Daisho / Blood Eagle – these rulesets are published by good friends of ours. In addition, we’ve got exclusive rights to distribute the e-book versions of their rules.
Website Categories we’re killing
Games Workshop – when we closed our bricks & mortar shop down, our GW account manager said they would still be happy to supply us although it might be at a slightly lower discount. Once the decision was made and we communicated it to them, they then changed their line. They then told us we had to have a physical shop or they would refuse to supply us. Heavy discounting of GW products, and their insane release schedule were factors which most harmed our cashflow. Their lack of loyalty to a customer who spent over £125,000 a year with them was both saddening and unsurprising. I see it as their loss more than it is ours.
Alclad – popularity has slipped as newer products have come onto the market (e.g. Vallejo Metal Color). More importantly, postal regulations continue to tighten. We believe that Alclad are rapidly slipping from “grey area” territory into “complete no-no” when it comes to posting them, even within the UK.
Ultimate Modelling Products – this was a difficult one ! The products are lovely, they are popular, and the people behind the business are great to deal with. Unfortunately, they have an incredibly low profit margin, a significantly longer lead time for deliveries than any other UK supplier, and a pricing model where the discount is based on buying a lot of each item to get the top discount level rather than being based on overall spend.
Warlord Games – great products, great supplier to deal with, but with long (and highly unpredictable) lead times on orders. The main problem is that they are so heavily discounted by other sellers that the profitability is absolutely minimal. We may make them an “available to order” range at a later date if there is demand.
Website Categories we’re not sure
Mig Ammo – popular and reasonably profitable, but require massive minimum order values to get a good discount. We’ll restock this if the Euro exchange rate stabilises and once our cashflow will support repeated regular orders.
Lifecolor – a bit of a niche product, but popular with it’s own audience. The supplier is great, but minimum order values are quite high, and it takes up a lot of space. In addition, prices haven’t been stable since Brexit. This may be a good candidate for a range that is available to order rather than kept in stock.
Gunze Sangyo / Mt Hobby – nice products, great supplier, but tend to sell on other channels at low margins rather than through our website.
Airbrushes – cost prices (particularly for Iwata) have gone through the roof over the last few months. Online discounting has become more prevalent as this is an easy way for competitors to recoup cash. The profitability is low considering the amount of support and advice which is required. These are another good fit for the “available to order” model. It is our intention to continue stocking key spare parts for the foreseeable future.
New website categories we’ll be adding
RPG’s / Dungeons and Dragons – our favourite game, so it makes sense to stock it !