Ok, I can at least shed some light on the costs involved. Speaking as a model manufacturer I have used/do use or at least know the ins and outs of all the processes they use to make their minis. Suffice it to say that the cost of the material, white metal and plastic, is relatively low. Same goes for packaging. This also is true for FW's resin (I use the same stuff on a daily basis.)
As UkFreddyBear pointed out very astutely, it is the
overhead costs (wages, bills, insurance etc etc) that keep GW's prices high, not the
direct costs (materials etc.) GW have massively larger overhead costs than most smaller ops, simply because they are a bigger operation. Its a pretty basic law of business that as you get bigger, your overhead costs grow exponentially, not linearly. At the same time your direct costs will come down as your manufacturing becomes more automated and you can use cheap materials in huge quanities.
Maybe the prices could be a bit lower, but I don't think theyt could eat into their profit margins much before they seriously harmed their growth. Their gross profit (basically how much you make once you deduct materials and direct costs) is probably very large. They charge £20 for a squad box but if you break down the actual costs of whats in the box and the box itself you are probably looking at a profit of £17 at the very least. However, GW's net profit (what you make after paying all the other costs like your staff) is comparably low (£9m in 2009 from £120m ish total sales.) So be under no illusions, GW's top brass are not laughing at us and bathing in money. Smiling and rubbing themselves with it, maybe, but they aren't turning a profit hand over fist. They seem to re-invest a heck of alot of their profits aswell, which means better products for us.
senoja wrote:
if u need to justify it look at how expensive forgeworld stuff is thats cus they have always used these types of moulds for resin itsa only recently tht they can b used for plastics to with the same level of detail
I'm sorry but that is not correct. Plastic injection moulding is very different to sillicone moulding. You got the bit about the giant tatoo machine right, the negative (or cavity as we call it) of the shape that will be cast is cut into steel using a milling machine and a pantograph or more recently a CNC computer controlled mill. This process takes literally
weeks and is THE most expensive way to make anything. The moudling costs associated with making vulcanised rubber molds for white metal and RTV silicone moulds for resin are teeny tiny by comparison. Less than 0.5% if even that. However, once you've got your steel mould, the polystyrene plastic you use to cast your pieces is dirt cheap, in fact actual dirt is probably more expensive. Metal and resin are several £'s per kilo, so the material costs of those models are much much higher and consequently the gross profit is lower. Thats why everyone starts off using metal or resin, it's just cheaper to get into and the profit margins are great until you reach a certain level of production.
So now GW has spent hundreds of thousands on a mould and have to sell tens of thousands of copies of the sprue before they make a profit. To compare them to Revell or Tamiya is understandable, but consider that for every one sprue GW sells they probably sell 50 or more. That, simply, is why GW plastics are so damned pricey - they are trying to claw back the cost of that £200,000 mould back and all their overheads as fast as they can. If they didn't the cashflow problems would simply kill them dead and we'd have nothing at all.
Pinky Beecroft wrote:
I would have assumed that most GW stores are franchises with each franchisee responsible for the profitable operation of the store and paying some form of annual fee to GW, just a guess so I could be wrong.
GW own all their retail stores at enormous costs. They don't operate like subway or any other franchise, they personally run every GW store and it's all controlled centrally from Lenton. Pretty effectively IMHO
.
So I guess what I'm saying is that yes they could stand to lower them by a few pounds, but they'll never come into line with the big plastic kit manufacturers' prices unless their products become as popular as tank kits and such, ergo if we want prices to drop then we have to get more people involved with the hobby
. Just some food for all your thoughts
.
Highlordell wrote:
think before you buy.
Never a truer word spoken
.
Will.
EDIT: I've just realised that what I've said there may not hold up much when you compare plastics from emerging companies, I can't remember the name of the specific company I have in mind but it always gets brought up when GW prices are discussed. I don't know about how they do things so I can't speculate much on why they are cheaper. But I'm guessing China may have alot to do with it.
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