Monday, 5 December 2011

The price ain't right - International comparative pricing and Games Workshop

I came to a realization today and have made a decision on something, I'm not going back into my local Games Workshop store. Not unless something dramatic happens that fundamentally changes Games Workshops attitude and business model.

I like games workshops models, and they have a good hobby supply range. I’m not saying I won't buy their products or play their games, but I’m not going to the local store again.

Why? I hear you ask...... you're asking right? Is anyone there.... is this thing on?

Well it comes down to price

Games Workshops pricing model for New Zealand is insane and makes purchasing their product from their stores insanely expensive. I know you international readers will say “Oh yes, its is expensive”

I tell you this now

“Shut up, you have it easy, its fracking cheap compared to what we pay at our local store” (Unless you are in Australia, in which case you are equally fracked)

Behold my awesome math skills with some items I would like to buy to finish off my Sons of Medusa Army

Rhino – 64 NZ , Ironclad – 87 NZ  Thunderfire Cannon– 100 NZ

Ok, lets compare those with the Games Workshop UK prices

Rhino – 20.5 UK, Ironclad – 28 UK, Thunderfire Cannon – 30.75 UK

But Sir, I hear you say. The NZ dollar ain’t worth squat compared to the pound. Well, that’s not exactly true and hasn’t been for quite some time now. The NZ dollar is about half the value of the pound and has been increasing in value for a decade

See this graph here, which shows comparative exchange rates for between the UK and NZ for the last 10 years.

So, if prices were based on what the currencies are worth currently then models in New Zealand are being sold at approximately 152% of the comparative retail price in the United Kingdom. These prices make sense only if the regional pricing model was developed a decade ago and carved in stone. Sadly I wouldn't be surprised if a ratio was developed sometime ago and hasn't been adjusted, agile business practice is not GW's forte.

I understand some shipping costs and effort is required to get product to NZ, and I wouldn’t mind 10-20% premium for this. But 50% extra is over the top.

This is of course if I’m buying direct from Games Workshop UK, which you can’t really do due to the massive shipping charge they have in place. Go to GW’s site, change country and try to ship from the UK to NZ. The shipping costs should make you laugh. Someone please explain why it costs 83 pounds to ship Assault on Black reach to New Zealand.

This is before I try to look at alternative sites to buy from. One, which has to email you an excel sheet with their prices

Rhino – 26.40 US, Ironclad – 35.60 US, Thunderfire Cannon – 39.60 US

The NZ dollar has been about 70-80 US Cents for the last few years, but as I’m paying online I know exactly what the exchange rate is when I purchase. Lets take these costs at 75 cents to the dollar, which is lower than they are currently (around 77.8)

Roughly we are looking at prices 55% of what you would pay retail at our local Games Workshop (or 182% of the online stores cost to buy local)

Shipping is an additional cost, but you can get deals and when you buy in bulk it works out creatively cheap. You can also buy from people on Trade Me (NZ's local eBay) who do large bulk orders and then on sell.

The ultimate truth

And here’s the kicker, no one is stealing from GW here. They get their money for the product whether you buy from the local store, direct from online, or via a 3rd party supplier. This isn’t piracy, it’s understanding that in an international global economy we have choices about how we procure items. GW could prevent anyone other than their stores from selling product, but that will ultimately harm them more than help them.

My decision

It’s simple, I can enjoy the hobby and modeling without having to pay an 80% surcharge to go into the store. I can buy online, own the product legitimately and support their business without being made a victim of geography.

Sure, there are some small items I won't bother to get shipped from the US, like paints and brushes. Fortunately for me the entire GW range is stocked by another hobby store. GW still get their cut, but the local GW store doesn't. There's also another friendly gaming store that isn't local anymore that I will order from as well, mainly as it's owner has good online service, free delivery within NZ, an understanding of his customers and knows what the exchange rate is. (It's Mark One in my old home town of Hamilton)

If actions like mine cause the local stores to suffer, well that’s too bad. A business that operates this kind of pricing model is doomed to failure in the long term. Especially as more shopping goes online, people become more savvy about comparative pricing. And it's only the money I spend, I'm sure they won't even notice it. All I can do is educate people about their options so they can choose. They may see value in having a local GW that over charges them, it may be a difference in perception between "Pricing" and "Value". All i know is I have X dollars to spend on toys and I want best value for that expenditure.

GW has good product, but I’d rather order it from a warehouse in the United States and have it flown 12,000 kms than walk 500 meters from my office building to the store.

Why? Because the price ain’t right


  1. To protect these insane margin levels is why GW made its UK resellers stop shipping out the the area. Customers used to be able to get products from Wayland and such at less than the local rogue trader stores could get it from GW at the wholesale price.

    I have a little discussion based on the GW data and how I think they are doing their accounting:

    Look at the last 2 paragraphs for discussion of Southern Hemisphere stuff.

  2. Interesting post there eriochrome, you have done some delving into annual report.

    It's pretty cynical business to cut off NZ like that, and worst of all it relies on your customers being either unable, unaware or unwilling to shop overseas.

    From what i've seen of the store here lots of business is done by getting rich parents to pay a fortune for models for their indolent children. The kids are unable to pay, and the parents probably don't know.

    However, this must kill their single male 20-35 young professional demographic. There's a group with lots of spare income and the intelligence to shop smart.... at least I hope it is.


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