From here onwards, we should be on a regular once-a-week release schedule for our video reviews. If there’s anything you’d really like to see us review, let us know, and we’ll do our best to get it into our filming schedule.

Angry Birds : On Thin Ice
Bang! Gold Rush Expansion
Black Crusade : Hand of Corruption
Chibithulhu Halloween Plush
Dust Tactics : Corps Officers
Dust Tactics : Heavy Kommandotrupp Command Squad
Giza: The Great Pyramid
Mini Chibithulhu Plush – Black
Mini Chibithulhu Plush – Red
Nexus Ops
Pathfinder Adventure Path : the Jade Regent – Tide of Honor
Pathfinder Campaign Setting : Jade Regent Poster Map Folio
Pathfinder: Inner Sea Magic Campaign Setting
Pathfinder Gamemastery Cards : Serpents Skull Item Cards
Pathfinder GameMastery Condition Cards
Pathfinder GameMastery Flip-Mat : Pirate Ship
Pathfinder Gamemastery Map Pack : Magic Academy
Pathfinder Gamemastery Map Pack : Swallowed Whole
Pathfinder GameMastery Plot Twist Cards: Flashbacks
Pathfinder Module: The Ruby Phoenix Tournament
Pathfinder Player Companion : Dragon Empires Primer
Savage Worlds : Deadlands Player Guide Explorers Edition
Savage Worlds : Iron Dynasty – Way of the Ronin
Savage Worlds : Thrilling Tales
Sparta
Warhammer: Invasion LCG : City of Winter
Resident Evil: Zombie Game Mat

The Calculations

The question is ROI here, and to do that, we’d need make a few assumptions on:

• Timeframe – amount of time from funding to delivery of a project
• Number of copies purchased
• Turn rate of inventory
• Gross Profit Margin Percentage

So, let’s say we invest $100 in a Kickstarter project to purchase 12 copies.  It takes 6 months for a project to be delivered and we have a turn rate of 4 and are using our Gross Profit Margin of 50%.

So for example, if we manage to acquire 12 copies at a turn rate of 4; the $100 investment is actually invested for 3.5 years (delivery time & time to sell all pre-purchased copies).  Invested normally (i.e. into other stock), that’d be a gross profit of $700 on $2,100 of revenue.

Here’s a little chart based on gross margin that we’d receive if the $100 was invested in ‘normal’ stock.

So, those 12 game copies would have to make $700 of gross profit, or approximately $58 each. That’d be about a 90% discount on an MSRP of $65.

Let’s say we only get 4 copies on a $100 investment in Kickstarter.  That means it’d sell out in 1.5 years from now.  The Kickstarter-games would then have to generate only $300 in gross profit- which again works out to be about $75 each.

Conclusion

With there continuing to be a constant flow of games via publishes in the ‘normal’ channel; I just can’t see a reason to invest in Kickstarter anymore as a retailer.  The time delay between purchasing a game and having them come out is a significant opportunity cost – at a turn rate of 4; we forego $100 in gross profit.  As such, a game has to ‘make’ back that amount in discount for us immediately; which seems almost impossible and still be profitable for the publisher.

Following is the Bestseller’s list for the month of November 2011. We’ve excluded any accessories and any pre-orders from this list to provide an idea of ranking for in-stock items.

1. A Game of Thrones Board Game

2. Dominion : Hinterland

3. Dominion

4. 7 Wonders

5. Ticket to Ride Europe

6. Twilight Struggle Deluxe Edition

7. Forbidden Island

8. Pandemic

9. Dominion : Seaside

10. Ticket to Ride : Asia & Legendary Asia

Our Hottest Pre-Orders for November 2011

1. Eclipse

2. War of the Rings Second Edition

3. Ticket to Ride Map Collection: Volume 2 – India & Switzerland

4. Puerto Rico Anniversary Edition

5. Power Grid : the First Sparks

6. A Game of Thrones : Kings of the Sea Revised Expansion

7. Thurn & Taxis

8. Memoir ’44 Campaign Book Volume 2

9. Mage Knight the Board Game

10. The Manhattan Project

Perhaps the most interesting aspect of all this is how big a drop Settlers has taken in our bestsellers list. The prevalence of the game outside of jobby stores has seen it drop in overall popularity with us it seems.

We carry a relatively lean inventory for most items; attempting to stock 1 1/2 weeks worth of inventory for each time at any one time.  Of course, due to the nature of retail, there’s no telling which items will sell in any given week; so we actually stock 1 1/2 weeks worth of the expected average quantity sold.  As an example, we generally keep 7 copies of Settlers of Catan in-stock and 5 of each of the Ticket to Ride & Ticket to Ride Europe.    In any given week though, we might only sell 2 copies of Settlers, 4 of Ticket to Ride and 0 of Ticket to Ride Europe.

With board game stock; we have 3 main distributors that we use and a number of other minor distributors.  For the main distributors, we generally place an order with them once a week throughout the year, picking it up on Thursdays.   However, during Christmas; we increase the frequency of pick-ups to twice a week to deal with the increased volume of sales.

This saves us a huge amount of committed capital – by doubling the number of pick-ups we do; we effectively increase our stock by 1.5-2 times.  Why not 2 exactly? That’s due to the in-transit times of our shipments to us.    For 2 of our main distributors; we are a 2 day ship – which means an order shipped on a Tuesday arrives on a Thursday.  Knowing this, we need to plan for a 5 day gap (Wed – Monday) where no new stock would arrive from these distributors.

While our distributors have generally been extremely good at shipping out orders placed on the same day; there is unfortunately an occasional hiccup and that’s when relying on a lean inventory system becomes a huge problem; especially when we do pick-ups only once (or twice) a week.  If we place the order, expecting them to ship the same day and they miss by one day; we end up waiting an entire extra week (or half-week during Christmas) for our stock.

If it’s a week, and we have only 1 1/2 week worth of inventory in-stock; that means we are actually ‘missing’ sales for up to a week.  E.g. I place an order for 5 copies of Settlers of Catan on Tuesday, having sold them the week before.  I now have 2 copies left.  By Thursday, when I expect my restock, I might have 0 copies left.  However, if my distributor  or UPS misses their shipment to us by a day; we must now wait till next Thursday to receive our stock – missing out on the sale of another 7 copies.

On the other hand, if I stocked for 2 1/2 weeks worth of inventory, I’d effectively increase my capital investment in stock by 66%.  Which, if you’re talking about $100,000 in inventory is $66,000.

This is probably due to how FedEx manages rural deliveries – instead of delivering the items themselves; they bring it to their closest location and then puts the item into Canada Posts’ system for delivery.  Obviously, FedEx has to recoup their costs in some way for doing that – and the simplest way is to charge it to us.  It also means that Canada Post is actually going to be cheaper to ship for us.

How much of a savings? In a recent worst case scenario; an order that would have cost us $50 via FedEx to ship cost us $30 via Canada Post.  That’s a savings of over $20 on a $200 order.

I’ve debated getting rid of FedEx entirely; but it’s obviously a shipping method that is liked by some.  As such; we’ve decided to keep it – it’s a great back-up and the additional work it adds to our workflow right now is minimal.   However, we will only ship for free via Canada Post from now on.