Simon J Rogers - Esoterrorists
ProFantasy Software and Pelgrane Press blog

simonjrogers
Date: 2008-01-30 16:36
Subject: Esoterrorists
Security: Public
Tags:esoterrorists, gumshoe, i'll show you mine, pelgrane, trail of cthuhlu

As I am now listed on IPR, I thought it might be nice to get all share-y with the data, as my fellow IPR publishers often do.

From its release to the end of 2007, The Esoterrorists has sold just over 1000 copies.  I'm really pleased with this - it's our best selling game (just) since The Dying Earth RPG. Nearly 20% of the sales are PDFs, and thirty-five in GUMSHOE bundles. 70% of print sales are through traditional distribution to retail channels via Impressions Advertising. 66% of the PDF sales are through One Book Shelf, that is DTRPG and rpgnow.com.



I make about three times as much on a print mail order sale as a retail sale, and there is a good chance I'd make more money if I didn't sell this book through distribution at all. So why do I do it? First, I could be wrong; I might not sell enough to make up for the shortfall. I also want to do my little bit to help retailers, which I do think helps the industry. But, it's mainly because I'd rather risk making a little less money and have more people playing the game. This is partly non-commercial, but also, the more people playing GUMSHOE games, the more they are likely to buy new ones. For example, through GUMSHOE brand recognition, it might help Trail of Cthulhu sell the much greater volume it needs to pay for my first offset litho print run for five years. Trail has had good pre-order levels in the main thanks to IPR, and these has really helped make the print run possible. I'm printing 2000 off, which I hope I can sell through in a year, although with 4e round the corner, who knows what will happen?

It's interesting that some indie designers I've spoken to (Paul Czege for example) would rather maximize their return per book, and not sell so many copies. Some (not sure about Paul) think the whole three/four tier structure is broken altogether, or there is even a whiff that it is somehow morally dubious. To be honest, unless you are selling thousands of copies and using offset litho, the economics of selling through distribution are marginal, but it's only through distribution that you can sell huge numbers. Perhaps I'm just nostalgically hoping for an enormous 5000-book hit with ToC.


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Evil Head
User: drivingblind
Date: 2008-01-30 16:48 (UTC)
Subject: (no subject)
Interesting comparison. Your conclusions (distro's not much worth it without large print runs) match mine pretty closely.
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simonjrogers
User: simonjrogers
Date: 2008-01-31 10:38 (UTC)
Subject: (no subject)
Incidentally, I made a thoughtless error in the pie chart, which shows the real picture.
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User: rpmiller
Date: 2008-01-30 17:36 (UTC)
Subject: (no subject)
As a recent student of many business classes (working on my degree) it seems to me that if you contacted the retailer directly, offered them a lower price than the pay the distributor currently, but more than what the distributor pays you, you would have both more profit and more sales. However you would have to compare that to the cost for doing the distribution work yourself. Of course, then you have all the politics to deal with, but as many a professor has declared, business is business and should never be personal if you want to stay in business.
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User: heliograph
Date: 2008-01-30 19:37 (UTC)
Subject: (no subject)
The real problem is following up the retailer accounts and getting them to pay you. With a distributor, you can withhold your next shipment to get payment, but you don't want to have to do that with 500 different retailers. The distributor's margin isn't that big anyway (10-15% of MSRP, tops).

What Simon's talking about is skipping the hobby chain (retailers and distributors) completely, and only selling direct. There you're making more than twice as much per sale (before counting the costs of making those sales).
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User: rpmiller
Date: 2008-01-30 19:53 (UTC)
Subject: (no subject)
Ah, I see. Yea, selling direct is definitely a higher profit, but like he said not without risk. However, once you get a good brand recognition I would think that you could do it, or perhaps publish the core book and include the url for the additional books. So you go through normal retail channels for the initial product which would require that channel more anyway, and then switch to direct for all the follow-up books which historically are going to have smaller sales anyway.

As for the dealing with 500 retailers issue, that can be done, but the business would have to have an accounts receivable person and a good ERP system to track their customers and accounts, but I agree the distributor is the easier method.
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simonjrogers
User: simonjrogers
Date: 2008-01-31 10:34 (UTC)
Subject: (no subject)
There are many reasons why direct to retail sale is very difficult, and collections is one of them. The other major one is that retailers simply don't want to deal with individual manufacturers.
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User: rpmiller
Date: 2008-01-31 17:26 (UTC)
Subject: (no subject)
Yea, I've been hearing that for a few years now, and its always been in the back of my head as a possible business opportunity. The unfortunate truth about most retailers is that they really don't have a full understanding of the capabilities of the technical side of business and the available software that is available. I've considered starting a business with the sole goal of helping retailers understand that they too will have more profit by buying direct and it won't be nearly the headache they think it will be.

I've discovered in my discussions with many retailers that they don't actually have business backgrounds and are really doing things by the seat of their pants and most are former gamers that thought it would be cool to open their own store. These are the people that need the most help I think.

Honestly the distributor model is aged and unnecessary in this day and age. Look at Amazon as just one example. They built their whole business on JIT ordering and shipping. There is no reason that publishers and retailers couldn't do the same and in fact it would be a whole lot easier since there is a much smaller base and even smaller supplier.

The real challenge for me would be making my business ideas work with the smallest amount of capital expenditures to both myself and the retailers and publishers. So far, I haven't come up with a short term method that would work and most retailers are struggling as it is so it isn't particularly feasible for most. There are a few out there that have the hardware and capital to do it, but they also don't particularly want change either. I think it is really going to take an innovative new retailer to start up and show the others what can be done.

So, after that long drawn out response... I agree with everything you guys are saying, but I hold out hope that it will change soon because when it does I think the increase in profits on both ends will benefit the industry as a whole, and maybe, and its a big maybe, the prices might come back down to the range they need to be at for kids to get into the hobby again like we did because without kids getting into it our favorite past time will die.
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User: (Anonymous)
Date: 2008-01-31 18:10 (UTC)
Subject: (no subject)
>>and maybe, and its a big maybe, the prices might come back down to the range they need to be at for kids to get into the hobby again like we did because without kids getting into it our favorite past time will die.<<

This is not an issue of distribution, for the most part. This is an issue of expectations.

When D&D was young, it came as a saddle stitched digest booklet.

When we first got in the industry in 1996, our first miniatures game was also a saddle stitched little booklet and it sold great in that format. It was the right price and format for the content.

But since that time as more multi million dollar outfits from the toy industry have entered our market (Hasbro, Tops, Upper Deck, Mattel, Bandia, Score, Nintendo, etc) the expectations on production format has risen. If you are publishing a new RPG these days and its not a large format hard cover, its rather hard to be taken seriously. These days the market really seems to want nice hard cover, full color throughout book, at yesterdays soft cover and saddle stitched B&W interior book prices. Its unrealistic.

But just to make you happy, we are planning a new rpg line where the core books and majority of supplemental materials will be sold in $2 booklets, available online for free (ad supported) and with stripped down versions of the core books to be sold through the dollar store markets. Is that low enough? :)

Ryan
GOB
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User: rpmiller
Date: 2008-01-31 19:02 (UTC)
Subject: (no subject)
Sounds like it is, but you would have to ask the kids out there. I personally have no problem with spending the big bucks for the quality books. Which is a good question, how many publishers and retailers are actually advertising to the younger generation? This again falls back on the whole discussion above about lack of real business knowledge by many retailers, but I can say that none of my FLGSs are advertising in any venue that gets to the kids in my area or in the greater metropolitan area, that I am aware of. I'm not talking about huge ads either, I'm talking about doing things like contacting the local middle and high schools and buying an ad in their school newspaper, or putting an ad in the neighborhood paper that goes out weekly. Anyway, another tangent/discussion for another day.

Yes, I think that you have the right idea, and hope that you do well enough with the new line to make it worthwhile and hopefully others will follow suit. We definitely need more kids getting their heads out from in front of video games and actually using their creativity and reading books (or pdfs) again.
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User: (Anonymous)
Date: 2008-02-01 05:51 (UTC)
Subject: (no subject)
>>I'm not talking about huge ads either, I'm talking about doing things like contacting the local middle and high schools and buying an ad in their school newspaper, or putting an ad in the neighborhood paper that goes out weekly.<<

Thats purely in issue of distribution, or lack thereof. The only way it would make sense for me to do advertising in a local market like that would be if my product had heavily saturated retail presence of I had my own retail presence. the first would allow enough units to be sold to recover the cost. The second would allow less to be sold but I would capture 100% of the cover and expose customers to our own store, where we could sell more things than just that which was advertised.

Its rare that a company in our industry has that level of presence in a local market. WOTc and GW are likely the only ones that may have that and even then in selective markets.

Advertising only makes sense when your product is readily available enough to those being advertised to that they can easily buy it. Now, if my product was stocked deep enough and merchandised well enough at a store within spitting distance of one of those local schools, then its quite possible that advertising there would make sense. But its rare that a retailer will take a strong enough stock position with a product for that to make sense.

Ryan S. Johnson
Guild of Blades Publishing Group
http://www.guildofblades.com
http://www.1483online.com
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User: rpmiller
Date: 2008-02-01 06:22 (UTC)
Subject: (no subject)
I wasn't talking about publishers. I was talking about the retailers. Retailers are the ones that need to advertise. Publishers supply retailers with ad material, but the retailers advertise to get people into their store. Business 101.
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wordwill
User: wordwill
Date: 2008-01-30 17:39 (UTC)
Subject: (no subject)
This is really fascinating material, Simon. Between you and Fred, here, there's a lot of really intriguing information on the indie market floating around. Please share more of this stuff as you're able.

And, given what a lovely book Trail of Cthulhu is, I think it'll be some kind of hit. (Not to jinx it.)
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User: (Anonymous)
Date: 2008-01-30 23:28 (UTC)
Subject: (no subject)
I've always been a little reluctant to share this sort of data, but I can't see it will do much harm. The market is so tiny that we are better off helping each other.
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User: heliograph
Date: 2008-01-31 00:22 (UTC)
Subject: (no subject)
"although with 4e round the corner, who knows what will happen?"

Not everyone will buy in. A bigger worry would be a sudden flurry of CoC releases from Chaosium or Pagan eating up the Cthulhu-fan dollars.

Have you been able to get a read on what a Chaosium release typically sells now?

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simonjrogers
User: simonjrogers
Date: 2008-01-31 10:34 (UTC)
Subject: (no subject)
I can get almost no info from them at all about this.
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