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post #1 of 18 (permalink) Old 12-12-13, 02:57 PM Thread Starter
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Default GW's Profits

No, this is not a thread where I'll be bitching, nor do I really want it to turn into one where everyone else is either.

Because of some back and forth I was having with someone I went and pulled GW's investor information and found a breakdown of their revenue and where it all goes. And that got some wheels turning. While I couldn't tell you how much every single thing costs I could do a little comparative look at something and show where all the money goes and how much GW actually makes off of it.

Now because I didn't want to throw things off, nor did I want to work out a 4 year average for each category I went with sticking to an item that is still priced the same in their 2013 fiscal year: Kalibite Warriors.

Now a small note before we get too deep: Cost of Goods Sold (which says how much it costs the company to make what they sold) and Operating costs are fixed amounts. They don't change, but what we're showing isn't how much it actually costs, just how much is paid into each from a single box of Kalibites.

So first I calculated what percentage of the a given thing went where:
Cost of Goods Sold (CoGS): 27%
Operating Expenses(Sales, Admin, ect): 57%
Taxes: 4%
Profit: 12%

In the UK a box of Kalibites costs 18GBP. While currency doesn't matter because GW reports no losses or gains on currency exchange, so we can look at whatever, I felt sticking to the Pound would keep people from yelling at me later. So we take that number and multiply it by our percentages and sees what comes out (all amounts of course are in GBP):

CoGS: 4.86
Operating Expenses: 10.26
Taxes: .72
Profit: 2.16

And here we can see that GW only made a little over 2 quid in actual profits off that box of Kalibites if they sell it for full price. Now as FLGS don't pay as much let's take 60% of that original price (what an FLGS typically pays on non-direct only items), which is 10.80GBP, and see what comes out next:

CoGS: 2.916
Operating Expenses: 6.156
Taxes: .423
Profit: 1.20

Now I know that there is a fixed cost on each item, and on their operating expenses, but remember, this is just how much of the item is being paid into covering that cost, not how much that item is actually costing them to make. And yes, we can clearly see that GW only makes 1.20 quid on a box of Kalibites when they sell it to your FLGS.

So based on a comparative break down of what things are sold for vs the percentages of where it goes, GW really isn't running us through the ringer as much as people claim. The amount of money they make on something is a lot lower than I've heard claims of in the past as this gives us a better picture of how the money from a product gets divided up.

Well I thought it was interesting anyways.

Last edited by Zion; 12-12-13 at 03:34 PM.
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post #2 of 18 (permalink) Old 12-12-13, 03:37 PM
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Its pretty obvious from looking at prices of models from competitors ranges that they don't over charge as much as people think. Maybe it is because a typical GW game (be it Fantasy or 40k) needs a much larger number of models to get a reasonable size force.

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post #3 of 18 (permalink) Old 12-12-13, 03:41 PM Thread Starter
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Originally Posted by humakt View Post
Its pretty obvious from looking at prices of models from competitors ranges that they don't over charge as much as people think. Maybe it is because a typical GW game (be it Fantasy or 40k) needs a much larger number of models to get a reasonable size force.
That's largely due to the scale of the game (no puns intended there). GW's competition operates off of skirmish sized games, while GW has a scale closer to what you'd get if you were playing a historical.
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post #4 of 18 (permalink) Old 12-12-13, 03:53 PM
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damn much of the revenue is spent on the brick and mortars.

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post #5 of 18 (permalink) Old 12-12-13, 04:50 PM
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1 thought & 1 question

Do you know for certain if the percentage breakdown is related to the msrp or the wholesale price?

Related to the scale of the game, GW changed the scale intentionally when it shifted from 2nd ed to 3rd ed. In general the points cost were cut in half, I assume to increase sales. E.g. in 2nd ed, a basic space marine was 30 points. After the change in editions, a space marine was 15 points. The prices at the time either remained static or increased.

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post #6 of 18 (permalink) Old 12-12-13, 06:05 PM Thread Starter
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Originally Posted by Kreuger View Post
1 thought & 1 question

Do you know for certain if the percentage breakdown is related to the msrp or the wholesale price?

Related to the scale of the game, GW changed the scale intentionally when it shifted from 2nd ed to 3rd ed. In general the points cost were cut in half, I assume to increase sales. E.g. in 2nd ed, a basic space marine was 30 points. After the change in editions, a space marine was 15 points. The prices at the time either remained static or increased.
Honestly, the relation isn't likely this strict, but I felt it was a good representation of how the money flows compared to how much we pay for it. Very little is comparatively left over once you start cutting that pie up on each sale.
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post #7 of 18 (permalink) Old 12-12-13, 08:08 PM
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Fair enough.

My recollection from my flgs days is that whole sale was 60% or 70% of retail.

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"CHEESE!" is the battlecry of the ill-prepared.

Originally Posted by Deathscythe4722
Could someone please call the police on this guy? I can hear the English Language screaming in pain. This has to be illegal somewhere.
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post #8 of 18 (permalink) Old 12-12-13, 08:10 PM Thread Starter
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Quote:
Originally Posted by Kreuger View Post
Fair enough.

My recollection from my flgs days is that whole sale was 60% or 70% of retail.
That's the second breakdown.
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post #9 of 18 (permalink) Old 12-12-13, 08:11 PM
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The profit margin is likely based on wholesale so direct sales are high profit margins, though admin goes up slightly.

Also these are averages so som kits like tact or termies are higher side and are big sellers. I bet the better the sales on item th higher the profit margin they seek. No complaint jut smart business model for niche marketing.

Interesting I would have thought they could squeek out more, but I'm not complaining if they did. What I would like to know is ho the admin filters out. How much does the leadership make over the wharehouse guy. Knowing what tha disparity is would be how I would make my judgement, not how muc they try to make off us.
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post #10 of 18 (permalink) Old 12-12-13, 08:27 PM
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Quote:
Originally Posted by Zion View Post
That's the second breakdown.
Oh, I know. I did read your post.

I'm just corroborating. =)

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"To endure one's self is perhaps the hardest task in the universe." Frank Herbert, 'Dune Messiah'
Quote:
Originally Posted by Dethklokk
"CHEESE!" is the battlecry of the ill-prepared.

Originally Posted by Deathscythe4722
Could someone please call the police on this guy? I can hear the English Language screaming in pain. This has to be illegal somewhere.
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