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My two Friendly Local Gaming Stores told me that they are dropping their Paizo business.
The first one said they will no longer be getting any new Paizo products. The second one went into a little more detail. They said, "Paizo's terms and conditions became too toxic, and the owner is no longer comfortable doing business with Paizo."
Does anyone know what the floob is going on? Why would FLGS be dropping Paizo business?
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Likely because the same reason FLGS always have had a beef with Paizo: PDFs and subscriptions. Both drive customers away from the store.
But that has always been the case with Paizo. These two stores had been doing business with Paizo under that model for many years. And now both have suddenly dropped Paizo at around the same time even though that aspect of Paizo hasn't changed.
I very much think it is due to something else.
FLGSs don‘t even do any business with Paizo at all. They get their products from distributors.
Three of the FLGS's in my area both still do Paizo. They don't carry everything released but at least there's a presence.
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The second one went into a little more detail. They said, "Paizo's terms and conditions became too toxic, and the owner is no longer comfortable doing business with Paizo."
I'd really like to know what kinds of "terms and condition" that shop owner was referring to, given that he most likely never had any direct dealings with Paizo.
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My FLGS has been carrying less and less over the years, likely driven by actual walk-in sales. Of course, that's a feedback loop, since I don't bother going there anymore.
As for the original and very odd comment, I'd irresponsibly speculate that it's a single business owner who is... unenlightened, and disagrees with Paizo's politics, not policies.
I have long been aware of Paizo policies that make it a better deal for us customers to deal directly with them rather than going through their FLGS, but I cannot figure out why any rational owner of such a store would be unwilling to supply Paizo merchandise to a customer who nevertheless wants to get said merchandise through that FLGS rather than directly from Paizo.
Also, I have been seeing a lot more Paizo stuff at my local Barnes and Noble lately than I used to. I still don't see too many Player Companions or Campaign Settings, but the hardbacks are usually in good supply.
Anecdotally, mine is still all-in. Even has some of the special editions of the playtest rules on offer.
Part of that is because as a general gamer community, we make a point of picking things up there- I mean, if you read my list of subscriptions, there isn't much I actually need to buy from them, but I make a point of scooping up hardcovers from them whenever possible.
It looks like the edition change may have something to do with it. If that theory is right, things should pick up for Paizo at game stores after next year's Gencon (when the new edition is released).
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I was close friends with an independent game store owner a few years back - from what I gathered, it can be very difficult to keep everything stocked, and distributors can be very difficult to work with.
The owner of that store opened that store with the original plan being to largely cater to warhammer and malifaux and other miniatures wargame players, and for D&D/Pathfinder players, but until closing 90% of his business was magic the gathering. Games Workshop products where particularly risky to stock as GW had weird requirements about having to stock a minimum amount of products and having to have specific products on the shelves even if they didn't belong to games systems or armies that local customers where interested.
Distributors for other products wheren't as bad but they all had quirks that made it expensive and difficult for an independent store to manage keeping everything stocked, and at the end of the day the store was very vulnerable to changes in the market and demand for miniatures and books (though they kept being full past capacity for magic the gathering nights where people where buying entire booster boxes until the store closed).
The store in question closed a few years ago and about a year later the games store niche for that area got filled with a good games (good games is a chain here in Australia that mostly deals in magic the gathering).
I e-mailed one of the stores about this matter. Here was their response:
"Two or three months ago Paizo fairly radically reduced the product discount they gave to our distributors. The distributors, only able to buy Paizo at that new higher price, naturally, had to pass a new higher price into stores as well.
"Prior to this change, Paizo was already sub-par in its cost terms, but we continued to support the line because we had customers who wanted it. But this latest set of terms changes had made it so to resell Paizo products will generally be doing so at break even or a loss for most stores, once all costs (building, labor and other overhead) are factored in. Prior to this latest cost change, we carried nearly the entire Paizo line.
"As you may have noticed, we attempt to carry a great deal of product that many other stores do not try to support. But when a manufacturer decides stores should take a loss selling their goods, for the health and longevity of the business, that is when we have to end support for their product.
"I am hopeful the backlash from stores will give Paizo a chance to reconsider their terms as they move closer to 2nd edition launch. But at this time, the matter is theirs to decide, not mine."
If accurate, it sounds like Paizo upped the prices of their products to distributors.
I am disappointed.
That does explain a lot.
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I e-mailed one of the stores about this matter. Here was their response:
"Two or three months ago Paizo fairly radically reduced the product discount they gave to our distributors. The distributors, only able to buy Paizo at that new higher price, naturally, had to pass a new higher price into stores as well.
"Prior to this change, Paizo was already sub-par in its cost terms, but we continued to support the line because we had customers who wanted it. But this latest set of terms changes had made it so to resell Paizo products will generally be doing so at break even or a loss for most stores, once all costs (building, labor and other overhead) are factored in. Prior to this latest cost change, we carried nearly the entire Paizo line.
"As you may have noticed, we attempt to carry a great deal of product that many other stores do not try to support. But when a manufacturer decides stores should take a loss selling their goods, for the health and longevity of the business, that is when we have to end support for their product.
"I am hopeful the backlash from stores will give Paizo a chance to reconsider their terms as they move closer to 2nd edition launch. But at this time, the matter is theirs to decide, not mine."
If accurate, it sounds like Paizo upped the prices of their products to distributors.
I am disappointed.
The change we made was to remove the fast-pay discount of 5% at the distribution level and that I'm sure was passed along to the retail channel. They are still getting the product at at least a 40% discount, maybe more.
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The change we made was to remove the fast-pay discount of 5% at the distribution level and that I'm sure was passed along to the retail channel. They are still getting the product at at least a 40% discount, maybe more.
This seems like a very strange move given what’s going on with Paizo currently. With 5E stripping away customers and a reboot of their main product line, customer and retailer retention would have to be a priority. This move hints at some financial weakness at Paizo and confirms my feeling that if 2E is not successful, that will probably be the end of Paizo.
This just doesn’t seem like a move a healthy company would make. Full disclosure I don’t know diddly about the publishing business.
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The change we made was to remove the fast-pay discount of 5% at the distribution level and that I'm sure was passed along to the retail channel. They are still getting the product at at least a 40% discount, maybe more.This seems like a very strange move given what’s going on with Paizo currently. With 5E stripping away customers and a reboot of their main product line, customer and retailer retention would have to be a priority. This move hints at some financial weakness at Paizo and confirms my feeling that if 2E is not successful, that will probably be the end of Paizo.
This just doesn’t seem like a move a healthy company would make. Full disclosure I don’t know diddly about the publishing business.
The move was more about eliminating the extra work around policing who took the discount justly and unjustly and also trying to collect from those in the latter category.
Paizo is very, very healthy and a strong 5E actually helps everyone in our industry. WotC is uniquely positioned to use DnD to bring huge waves on new gamers into the tabletop hobby and that can only help Paizo. It's way easier (and way cheaper) to win over a customer that's already interested in RPGs that it is to find those people in the first place.
We also don't have near the overhead that WotC does so our games don't need to sell anywhere near as well as theirs. I wager that the product sales levels we are ecstatic about would be failures to WotC. It's like AA ball vs. Major League Ball, everything is night and day different.
Do we hate losing customers? Sure, everyone does. But we have to do what's right for our business and this was one thing that made sense for us.
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And additionally - something that everybody who goes on about comparing Paizo and WotC is seemingly missing AND what doesn't take any knowledge of publishing industry to figure out - Paizo is a medium company owned by two people. D&D is a secondary brand of a large subsidiary of a gargantuan publicly traded corporation.
These are two different planets when it comes to the question "who needs to be satisfied" and what are the benchmarks of satisfaction.
Pathfinder needs to make Lisa and Vic happy. Pay the bills and salaries, keep the company growing at whatever pace Paizo wants to grow at (spoiler alert: companies growing too fast are sometimes as much in trouble, if not even more, than companies that shrink).
D&D needs to make WotC leadership happy enough so that WotC leadership can make Hasbro leadership happy so that Hasbro leadership will make the Hasbro board happy so that Hasbro board can tell Hasbro shareholders "yeah this D&D thing is doing fine". And even if it's doing fine, it's still kind of affected by other arms of Hasbro's business, which includes big hitters such as Transformers, My Little Pony, Monopoly or Magic: the Gathering. And D&D isn't exactly as big as those.
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One more point of perspective that might be worth considering...
Typically a FLGS is a weird, unique beast. They're not monolithic unified chains.
For instance, our previous FLGS was... mellow. They stocked everything from Pathfinder to D&D to T-shirts for Star Wars, and a bunch of board games. You could get dice and Magic cards and a bunch of comic books. But they kind of did what they did. I asked them to get me Shackled City (this was before Paizo was a fully developed web store), and it took months for them to bother. Much more recently, I asked them to order a bunch of Alea Tools status markers. I told them point-blank that I just didn't feel like creating yet another online account and ordering myself from Alea, and that I'd be happy if they ordered two sets at full retail, and I'd pay for them (plus shipping), and they could keep a full set. Would've been a good $100 CDN profit, easy. "I'll look into it." Never did. Never said yes, never said no. So, a weird, diversified, mellow store that wasn't driven to profit.
They're gone and our new one has less and less RPG material, but if you want a rare Star Wars figure or video game plushy, or if you want to order a sandwich, or baseball cards, they're your place.
So hey. These individual business owners make decisions using their unique grey matter. Dropping one product over another doesn't mean an industry shift or represent some conspiracy or ominous trend, or predict some portent at Paizo. It can be as simple as "I want to focus more on selling naughty Hentai magazines."
Point is, they're... special.
If a distributor only gets a 40% discount, then they'd have to sell 60% of their inventory just to break even.
Then the FLGS would have to sell 60+X% (where X is whatever markup the distributor charges) just to break even.
I'm not surprised that the FLGS made the choice they did.
If a distributor only gets a 40% discount, then they'd have to sell 60% of their inventory just to break even.
You can’t comment on the distributors break even point without knowing what kind of markup they put on when selling to retailers, to say nothing about what happens to unsold merchandise all along the chain.
You can’t comment on the distributors break even point without knowing what kind of markup they put on when selling to retailers, to say nothing about what happens to unsold merchandise all along the chain.If a distributor only gets a 40% discount, then they'd have to sell 60% of their inventory just to break even.
I stand corrected.
Distributors would need to sell 60% to break even if they sold product at 100% of the price. Which they won't. Thus, they'd need to sell more to break even.
Same for the FLGS.
My original point stands.
In the book world, distributors don't have to pay for unsold product long-term. Someone like Amazon, yes. But typically a real distributor doesn't. I don't know for certain that applies to the distributors servicing the RPG industry, of course.
But typically with a distributor, they have to sell exactly one of a thing to make profit. This - of course - disregarding overhead from rent, heating, employees, property taxes etc. But typically if a book's MSRP is $100 and a distributor gets it for $60 then sells it to a store for $70, the store and the distributor both make profit. Again, infrastructure, including shipping, play into that, which is why a store will typically get a shipment in once a week with all of the things they ordered from distribution, in one box.
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In the book world, distributors don't have to pay for unsold product long-term. Someone like Amazon, yes. But typically a real distributor doesn't. I don't know for certain that applies to the distributors servicing the RPG industry, of course.
Hey Anguish, technically for our industry it actually works the opposite of what you've laid out.
All sales into the hobby distribution channel are non-returnable and all the sales into the book distribution channel are all returnable.
So when we sell books to Alliance in the hobby channel, they have to pay us for those products and they cannot return them. However, when we "sell" our books to Diamond in the book channel, all of those sales are returnable and we only get paid X number of weeks after a store like BN or Amazon sells the product.
And if the store, like BN or Amazon decides that a product isn't selling or wants to make room for something new, they can up and return every last copy they have to Diamond and we get zero. In fact we end up losing money because there are return fees that we have to pay and some amount of damaged product that has to be written off.
Thanks for the insight.
The problem - of course - is that it's easy to look at the race to the bottom from the outside and make critical judgement. Of course, Paizo has very real bottom-line costs, in terms of a book that arrives from your printer cost you a certain amount. Further, the MSRP has to be no higher than a certain amount before it will stifle sales. Between those two numbers exists the entire margin that you, the distributor, and a reselling store can share. It's not huge. How exactly the margin is split isn't easy to decide, and (evidently) everyone takes a risk by stocking and offering a product.
I don't envy anyone these decisions.
CEO
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If a distributor only gets a 40% discount, then they'd have to sell 60% of their inventory just to break even.
Then the FLGS would have to sell 60+X% (where X is whatever markup the distributor charges) just to break even.
I'm not surprised that the FLGS made the choice they did.
Distributors get a much larger discount percentage than 40%. Usually it is in the 55% to 60% off range depending on the manufacturer. Most retailers get their stuff in the 45% to 50% off range.
-Lisa
This is a most interesting conversation,
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It drastically depends for my region. There's a few stores that carry a healthy stock of Paizo, as well as DnD. Others, not so much. Most of the shops near me, I'm lucky if I can find more than 3 copies of the 5e PHB and 1 copy of the 5e DM's guide. A shop about an hour from me has plenty that I can choose from. And it's not just the local stores, it's the chains too. My nearest B&N? There's one section that has two shelves of RPG games, mostly DnD, but some Paizo, some SW, and a few others that have 1, maybe 2 copies of a book. B&N an hour away? Nothing in the section specifically labeled Role Playing. What's there? Sci-fi novels and video game art books. But if you want bibles galore, you certainly found the right place!
Yeah, being in the bible belt sucks for table top gaming...
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It drastically depends for my region. There's a few stores that carry a healthy stock of Paizo, as well as DnD. Others, not so much. Most of the shops near me, I'm lucky if I can find more than 3 copies of the 5e PHB and 1 copy of the 5e DM's guide. A shop about an hour from me has plenty that I can choose from. And it's not just the local stores, it's the chains too. My nearest B&N? There's one section that has two shelves of RPG games, mostly DnD, but some Paizo, some SW, and a few others that have 1, maybe 2 copies of a book. B&N an hour away? Nothing in the section specifically labeled Role Playing. What's there? Sci-fi novels and video game art books. But if you want bibles galore, you certainly found the right place!
Yeah, being in the bible belt sucks for table top gaming...
*nods*
*nods*It drastically depends for my region. There's a few stores that carry a healthy stock of Paizo, as well as DnD. Others, not so much. Most of the shops near me, I'm lucky if I can find more than 3 copies of the 5e PHB and 1 copy of the 5e DM's guide. A shop about an hour from me has plenty that I can choose from. And it's not just the local stores, it's the chains too. My nearest B&N? There's one section that has two shelves of RPG games, mostly DnD, but some Paizo, some SW, and a few others that have 1, maybe 2 copies of a book. B&N an hour away? Nothing in the section specifically labeled Role Playing. What's there? Sci-fi novels and video game art books. But if you want bibles galore, you certainly found the right place!
Yeah, being in the bible belt sucks for table top gaming...
I've live in it and have no issue at all.
*shrugs*
The real problem might be living in rural areas that can't support large FLGSs. I doubt that you would have too many problems in places like Atlanta or Charlotte.
Grew up in a smallish town, and when I was introduced to table top, it wasn't hard to find anything. When I joined the military, I was stationed in El Paso. Finding books wasn't terrible, it just never what you wanted because you already had it. Finding groups was absolutely terrible. Large cities can still have a lot of issue having with having groups. I've found that living in an area that has a lot of cultural (not specifically religion) suppression of the hobby in that point of time, then having the local support can make a lot of difference. The town I'm in right now has a lot of people over a very wide area. We may not have 10+ story buildings every block, but it's a good area of people. But the hobby just isn't very supported.
I don't mean to single out religion in my area when I say bible belt because in truth there's a lot of cultural impacts that can happen. For instance, if you live in a community that is very sports oriented, table top probably isn't going to be very large. The importance is football or baseball or something else there. And if you play this nerdy thing, you're liable to have the absolute crap beat out of you. Table top has been become more acceptable in today's world thanks to things such as Game of Thrones, Stranger Things, and of course Critical Role. But just because they're becoming more acceptable doesn't mean they're accepted everywhere.
Sorry if I caused any derail with that comment, that wasn't my attention.
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I first played D&D in college in a small town with no FLGS. I picked up the books in bookstores in larger towns while on break.
Colleges seem to be a great place to get into gaming.
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With going to PF 2.0... is PF 1.0 dead? Is all my stuff now complete without further creation?
PF 1.0 material will continue to be released until August 2019. After that, however, they plan to release new products only for Second Edition, although PF Classic content will still be available in PDFs and pocket-sized rulebooks.
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At my LGS the playtest, and Paizo products in general, sell poorly. Same with the larger LGS the next town over.
I wish Pathfinder was doing better.
Most of the stores I visit in my travels use to report solid Pathfinder sales, but over the years that number has continuously gone down. Some store don’t carry much of anything anymore and focus on special orders to fill any requests. It’s one of the reasons it time for a 2E. Nothing sells better than a core rulebook and the first few products after that also sell amazingly well. Heck even the 4E PHB/DMG/MM sold great. They only fell off later when the system was nearly universally disliked. Nearly ever edition of every game has seen falling sales over time that was reinvigorated with the release of a new system. There is reason to think we’ll see that same think happen in August.
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With going to PF 2.0... is PF 1.0 dead? Is all my stuff now complete without further creation?
Depends on what you mean by “dead.” Your books don’t suddenly burst into flames. When DnD 3E was released, my local group refused to update and we continued to play 1/2E for many years. It wasn’t until a few started getting involved in LG that our home games started to evolve into v3.5. You can easily continue playing PF1E well after 2E is released.