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46709 Posts in 5588 Topics by 13297 Members Latest Member: - Shane786 Most online today: 32 - most online ever: 429 (November 03, 2007, 04:35:43 AM)
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Author Topic: Sales Numbers and Retail (split)  (Read 1319 times)
visioNationstudios
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To Imagine, Dream, Create, Entertain, and Unite


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« on: October 18, 2008, 08:11:11 PM »

Quote
This may just be a skewed perception, but there seems to be a certain, subtle attitude of "needing to sell retail".

I recall reading this thread as it developed a few months ago, and I also recall something not sitting right with me throughout.  It also was a very instrumental thread for me, as our company is still just getting off the ground (one game released about a year ago, a few other projects out early 2009) and has yet to truly find its wings and fly.  So the notion that pushed retail seemed to stick with me.

But, I think I've finally figured out what bothered me back in July when I first read through all of this.  A lot of the comments/suggestions seemed to treat the concept of printing "more for less" and selling in retail stores as vitally interconnected.  What struck me today was the fact that they are both, in fact, mutually exclusive of each other.  What do I mean?

The examples were given of:
Print and sell 250 books at $20/book (keeping 85%) with a cost of $4/book means I make $13/book for a total of $3250 revenue on an investment of $1000 or a return of 225% (not including sunk costs)

Print and sell 500 books at $20/book; (250 keeping 85% and 250 keeping only 40%) with a cost of $2/book means I make $15/book on my direct sales and $6/book on my retailer sales for a total of $5250 revenue on an investment of $1000 or a return of 425%


I ran a few more figures just a moment ago, and found it important to point out that simply lowering the printing cost of your book from $4 to $2 (whether by changing publishers, printing more copies at once, or whatever), is really what dramatically affects the outcome of the revenue.  Consider:

Print and sell 250 books at $20/book (keeping 85%) with a cost of $2/book means I make $15/book for a total of $3750 revenue on an investment of $500 or a return of 750%.  Printing 500 books at the same price points, nets me $7500 after $1000 invested, keeping the 750% return.

Selling retail isn't what brought up the profits.  If anything, it actually dragged down the potential return immensely.  That was more of a bit of pork thrown in that detracted from what some of the others attempted to point out- that of keeping your costs low in order to maximize profit.  The examples above show clearly that the increased return was directly linked to the lower wholesale, not the sales in retail.

What's my point?  Well, I think this thread, again, has shaped my outlook for visioNation studios and our future.  I still want to take a stab at the retail market, especially since we have a few store owners who are already interested in carrying our products.  However, my outlook on our products in retail will now be focused mainly on helping gain vNs exposure, which we desperately want/need.  We feel we have great products to offer (don't we all?) but that we aren't sure how to get that message out to the gaming community in an effective manner.  So in this way, retail should help us quite a bit.  But in terms of making a buck, it doesn't appear that we'll be helped nearly as much as I once thought.  However, with an increased exposure, we should be able to tap other gamers who haven't otherwise heard of our product, which should ultimately result in more sales (either in the stores or from our site).  And selling more books at lower returns should eventually net better than selling less books for higher returns, right?

Anyway, this post may have ultimately been more for me to flesh some thoughts out loud than it was for anyone else.  If it helped, great.  If not, thanks for indulging me.
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-Anthony Anderson-
-Partner, visioNation studios-
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Ron Edwards
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« Reply #1 on: October 23, 2008, 07:19:27 AM »

Hello,

The above post was split from ORX, sales numbers, and retail. No big deal. Part of it is the time that's passed, and also that I think the topic will be best served by the split.

Best, Ron
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