2012 has turned into both an exciting and disappointing year for us. There’s numerous reasons for this, ranging from a number of unexpected costs, a game industry that is changing on its head and internal process changes.
The Changing Face of the Industry
We talked about how the industry has changed in the March of last year with distributor exclusives and Kickstarter. Since then, Queen Games and Mayfair Games have gone exclusive as well, while Tasty Minstrel briefly dabbled with exclusivity. Kickstarter games have started arriving in droves, and the shine has begun to wear off. Certainly, I’ve started being much more careful about which Kickstarter games to stock as we’ve been burned a number of times due to low on-going demand.
All of the above has actually driven our costs up – from direct Cost-of-Goods-Sold to inventory holding costs. We’ve had to review pricing in some cases and are likely going to continue doing so for the next little while on a number of lines. In addition, the plethora of games that are arriving means we are going to have to be much, much more careful about what games we stock. This year’s 300+ games in our Boxing Day Sale was a tad much.
Many of you noticed the huge site redesign that appeared in the middle of November. Frankly, the redesign was scheduled for 2013 after Christmas but a number of bugs had appeared on the site that required significant fixes. In the end, it made more sense to upgrade and redesign the entire site rather than to do patchwork fixes. Unfortunately, since it was budgeted for 2013 it meant that we had (have) a huge expense that was not really planned for. Thankfully, it’s not something we will have to do again anytime soon, though we are still fixing small bugs as we find them in the new site.
In other good news, Interac Online is finally up. We’re hoping it’ll drive our costs down; though as mentioned in my previous blog post it’s going to be a few years before it makes back our initial investment.
The video reviews were a qualified success. The reviews themselves have been a great success with the majority of comments highly complimentary. However as an advertising / revenue generation vehicle they have not panned out to the extent that we had planned. It’s one reason why we have to cut down to 26 videos (internally funded) and why we reached out to viewers to fund more videos in 2013.
We seem to have missed the entire CCG explosion that is going on in the industry in general as we continue to develop in other categories on the site. We’ve broadened our board game stock, added more RPGs and deepened our stock of miniatures. We’ll be trimming some of our miniature lines in 2013 and expanding others, while RPGs are likely to hold steady as they are.
The major addition has been our launch of the Used Games category. It’s still very much in an experimental stage, with us reviewing the cost associated (providing quotes, receiving shipments, checking contents and setting up the games on the site) and our profit margins on the category, but we’ve been generally happy with the new initiative. The only thing we will be tweaking the sale price / quote prices to ensure we are making a sufficient amount for all the work that is put in.
So what now? We’ve been talking about potentially moving locations to gain more space & windows but that’s another major expense. With a new part-time employee and all our other expenses from last year, we don’t actually have a lot of free funds for 2013. In addition, we’ve added a ton of new processes and it’s time that we started reviewing them to see if they are actually worth the trouble. With a lower expectation of growth for next year considering the disappointing growth figures in 2012, it’s going to be tough to do all the things we’d like to do without some major overhauls on the backend. Overall, 2013 is going to be a tough year of backend fixes and more rigorous review of costs.