2016 has been a mixed year for us, mostly with overall improvements in the business but with some setbacks as well.
Industry Consolidation & Restrictions
We continued to see industry consolidation including the purchase of F2Z by Asmodee creating a single company that now owns about 70% of all board game sales. We’ve already seen (and expect to see) further increases in our base pricing (as it stands, Asmodee products direct from Asmodee Canada are marked at 40% discount with an exchange rate of 1.5!). In addition, PSI is working to block the sale of games to online only stores, which has caused some issues for us (especially during Christmas) in terms of availability.
I expect we’ll see even more price increases / restrictions in the coming 6 months as Asmodee North America decides what they are going to do about Canada and other publishers follow suit in an attempt to reduce the price devaluation of their products online. This has been a trend in the last few years and I don’t expect it to change. It does however put us in an interesting position, which leads to…
Geek Product Explosion
Most of you probably noticed the huge increase in geeky products including clothing, pop figurines, graphic novels and more. I know it’s caused some difficulty in finding new board games, which is why we created a whole new category for listing new board games, but it’s not perfect as yet. The goal is / has been to widen and diversify our categories such that we are not as dependent on board game sales. We’ve now reached what I expect to be a stable inventory value / volume, and we’ll just be rotating product like our board games for the next year.
Backend & Stock Management
We mentioned last year we were looking at better ways to managing stock. That meant trying to (again) implement an ERP system. That did not go well, and after 6 months of struggling with the software, we put it to bed before the Christmas season started. It was painful in many ways since it did make ordering simpler, but order processing more difficult. Unfortunately, it also meant that our push towards using barcodes went haywire.
Our Location Move
We are extremely close to finalising our location move and once all the paperwork is complete, we’ll be able to provide further detail. Expect a full blog post about this once it’s ready. This has / will consume a ton of our time in Q4 2016 / Q1 2017 and probably Q2 2017.
The other area of major growth for us has been Kickstarter Fulfillment. From smaller projects like the 7th Seas RPGs to the giant Scythe fulfillment project, we’ve been busy with Kickstarter projects. It’s been fun to work with publishers directly and our current plans including actually going to GenCon & (potentially) BGGCon to meet more publishers in-person. It’s never (likely) going to be a huge business in Canada since our population is so small, but it does pay for the occasional nice meal :). You, our regular online customers actually benefit on the backend as the more product we ship, the greater our ability to negotiate lower rates. It’s probably something you might have noticed in mid-May as we dropped rates by over a $1 all across the board as we signed a new contract.
Overall, 2016 was a good year. We saw overall decent growth in our main game sales with some good growth in our new product lines / areas of business. With the big move, it’ll be time to consolidate further and trim product lines and selection to increase turn rates and provide a higher overall return from our investments.