Getting Into Distribution As A New Publisher

There are a number of different ways that a new board game publisher can approach selling their games. Most new and established publishers will do a combination of these various methods.

Sell directly to consumers
Sell directly to retailers who will sell to consumers
Sell directly to distributors who sell to retailers who sell to consumers
Consign inventory to a fulfillment company who sells to distributors who sell to retailers who sell to consumers

As you would expect, every middleman added to the overall process reduces the percentage of the final sale that goes to the publisher. At the same time, each middle man adds to the total sales force of the board game publisher.

Typically, retailers will buy games at 50% off of MSRP from distributors. The distributors buy games at 40% off of retail from the board game publisher.

Sales Force Thought Experiment

Please note, most of the numbers that follow are hypothetical.

As a board game publisher, I have an extremely small sales force, consisting of myself, Seth, and my wife. Let us also suppose that we will work to sell directly to consumers. We have already done this with the various per-order offers. We were very successful with this, and sold to approximately 170 different individuals. If normal distribution was not expected, we could have probably sold more than this. Let us suppose we have the sales capacity of 250.

Now, let us suppose that we concentrate on selling to retailers instead of directly to consumers. Let us also suppose that each of these retailers can sell the game to 10 people over the course of a year. Now all of a sudden, we sell to 250 retailers who sell to a total of 2,500 consumers. Of course, we only get 50% of the money from each sale, so it is like we sold 1,250 directly to consumers.

Now, we take it one step further. We sell directly to distributors. Suppose we sell to 10 distributors. These distributors sell on average to 150 retailers, who in turn sell to 10 consumers. All of a sudden, we have sold 15,000 games. We of course, only get 40% of each of those sales, so it is like we sold 6,000 games directly.

I hope this accurately shows the power of distribution. Of course, no real life situation is as simple as this.

Who pays for shipping?

Shipping is an expensive proposition for the new board game publisher. Often times when I think about various business models, the costs of shipping eat up much of the profits. Simply put, shipping is expensive! As with many things, as you increase the size of an order, you save money. So, if you can ship thousands of games to one place once, your shipping costs will be significantly lower than shipping one game to thousands of different locations.

Distributors are consistently shipping games to retailers. Adding one game per shipment costs very little on a marginal basis. Retailers are constantly shipping games to customers, or more often the customer picks up the games at the stores. This shows another reason why proper distribution is a powerful force for the sales of a board game publisher.

How To Get Into The Big Distributors

Now that we have established the desire to get proper distribution, the question remains of how a board game publisher gets their games into the big distributors. This is the difficult nut to crack. Distributors have very low margins, multiple large warehouses, armies of employees, and extremely low tolerance for risk.

Imagine spending $40 on games worth $100 retail, and turning around and selling those games for $50. Sure, you just made $10 on your initial $40 investment for a 25% return. Not bad upon my counting, until you realize that you need to pay rent, wages, insurance premiums, etc. Now, all of a sudden you need to make the same $10 transaction thousands of times every month.

Every time that I think distributors should be buying large quantities of every game, I just have to remember the above scenario. If such a distributor decides to buy 1,000 copies of Terra Prime and Homesteaders, then fantastic. However, if for some reason they cannot in turn sell those to retailers, then they will be sitting on games that eat into their capital and profits.

So, if you are trying to sell an unproven game to distributors, then at best they will buy a couple of cases and refuse to pay for shipping. That is their privilege as the gateway into large quantities of sales. Part of the problem is that a game will remain unproven without proper distribution. An expensive Catch-22

The Tasty Minstrel Games Answer

Utilizing yet another middleman, Tasty Minstrel Games gets significant services from game fulfillment company PSI. If you often read this blog, then you know how I feel about them… They are fantastic. Since distributors are already dealing with PSI every month, it is very easy for them to add orders of any size for Tasty Minstrel Games products.

The Cost Of The Easy Path

In any environment where you are trying to sell something… I find that the often overlooked and extremely important factor in buying something is the ease to buy. In an advice based environment like financial planning, many clients appreciate the facilitation of paperwork to the point of sign here. Even when selling free services, the ease of use can be incredibly important. Remember that Google is a powerhouse now because it made search very easy to use, and you could finally find relevant things on the internet. The IPod reigns as the best MP3 player, because ITunes finally made it easy to put music on the MP3 player.

Getting into distribution can be difficult, because it easier for a distributor to not set up a new account to purchase your games. Whereas, adding a product to an existing account is easy. Fulfillment companies have a similar situation. Since I am already with PSI and have an existing relationship, it is easy for them to add another product to an existing account than to add an entirely new publisher and set up all of the related accounting stuff.

On another note, it is easier for people to not buy games for a board game publisher than it is for them to buy games. So turn the tables of easiness on them, and make it as easy as possible for them to buy your games and also to sell your games. In the future, we will focus more on the following topics intended make it easier for people to buy and sell your games: