The race to the bottom: Shiny. Let’s be bad guys.

I woke up this morning ticked off.

You see, I’ve spent the last two weeks going through everything in my tiny store. One thing that I combed through is my Magic overstock cabinet. It’s full of Magic booster boxes. Some of these are Standard boosters, which I historically ordered deep at the beginning of the set. We haven’t had a shortage of current Magic stock in years, but my post-Return to Ravnica hoarding hasn’t changed.

A lot of it is product that was released in the last year that was supposed to be hot and limited-allocation. Eternal Masters. Planechase Anthology. Modern Masters. From the Vault: Lore.

I have been standing firm at MSRP for these products, because it’s my belief that discounting is a bad business model. It’s low return on capital and labor. It damages the consumer perception of the brand. It harms everyone up the chain, blowing money out of the machine like a disconnected air conditioning duct under your house.

All the retailers who discounted these products got their tiny pile of money back and are preparing for the next desperate, profitless sprint. Wizards sold all of their product to distributors or retailers and could care less what happens to it now. The customers in my area bought the discounted product elsewhere, and are playing with it in my store while glaring at the greedy prices on my shelf.

I played fair. I protected the value of the brand. I looked out for the other players in the industry by not doing anything to hurt the profitability of the product for my partners. It seems to me like I’m the one who consistently lost as a result.

My reward is that my customers hate my over-market MSRP pricing, my peers laugh at me while throwing away their youths chasing slim margins, and the publisher and distributors? Well, they say nothing, because they already got their money. They’ve realized that they have an unlimited supply of suckers who want to effectively sell their product for free. That must be great.

So next week we’re running a sale. We’re going to sell a bunch of this stuff at market price, margins be damned.

Don’t get me wrong: Discounting is a terrible way to try to make a living. I don’t intend to do it again. The way I intend to avoid that is by cutting my initial orders dramatically. The potential downside to this approach is that a limited-allocation product could hit, and I could miss out by not having enough of the product on my shelves. Reflecting on the product releases over the past two years tells me that I shouldn’t bet on hot unobtainium releases from Wizards in the near future. How many times does the ball have to land on red before you figure that something is up and stop betting on black?

My future orders will be for what I know I can sell. It works that way for every other product I carry, and Wizards of the Coast is no longer immune.

Discounters, you were right. You’re still idiots, but you’re not as dumb as I was for fighting the tide. Wizards has set up the incentives, and people always respond to incentives. They’re under no legal or ethical obligation to be judicious in their distribution of their product, but I’m certainly not obligated to be a punching bag while I try to defend it, either.

I’m a retailer, not a speculator. Nearly every time retailers start to fancy themselves investors, they lose. I won’t play that game anymore.

 

2 comments on “The race to the bottom: Shiny. Let’s be bad guys.

  1. Great entry, thats without counting ppl that doesn’t pay any taxes or whatsoever. Pre-order for Hour of Devastation is already well below MSRP price, so no point in trying to sell even for a 1$ profit.

  2. Pingback: My Week as a Filthy Discounter, Part I: Lessons Learned | Too Lazy to Fail

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