One comment though - if the intention is to get the game onto the shelf in retail stores, there's not enough margin in it at the current cost/pricing.
A store is going to require most (or all) of that margin - in most "dice game" type stores, if you want to put a product on the shelf at $20, you're going to need to sell it to the store for somewhere around $14 or they're not going to be interested.
Seems to me that at least an investigation into whether getting a run of 3,000 or 30,000 sets made up (and outsourcing the 80 or 800hrs of packaging work) would be a worthwhile exercise rather than being premature optimisation.
I was shocked (in the newbies do) to find out about the sort of gross margins retailers want. From where we are now, it seems like the only way we could reach that is through economies of scale that we are uncertain would pay off. Chicken meets egg once again?
In the market we're in (musical instruments/audio) the retailers with stores are going away, sales have moved online.
I'm not sure yet but I think the margins for online retailers could be less?
Every single thing in our lives is driven by this dynamic and it is a cancer.
What is the way out of this that keeps people happy and doesn't destroy us?
Would you be willing to pay $10 for a gallon of gas? Probably not. However, if you were open to paying this much the entire gasoline supply chain would not have to worry as much about their costs. It's action-reaction. Supply and demand.
Put a different way: If government somehow mandated tomorrow that on Monday gasoline will be $10 per gallon, gas company CEO's would be able to relax and not have to optimize their cost structure for some time.
Of course, this does not happen. People shop at Walmart and price shop online. In most businesses with decent competition it is actually very hard to make money without extreme attention to cost optimization. Popular liberal lore is that CEOs optimize cost because they are greedy. That is almost indescribably ridiculous. You optimize costs because if you don't, you die.
You should go through the exercise on Excel to see the effects. Pretend to start a business that will sell five items picked at random from Amazon.
The conditions are simple:
- You mortgage your house and invest $200K in this
- You have to compete with Amazon.
- You have to pay yourself a reasonable salary.
- You have to hire some people (you can't do everything).
- You have to pay rent, utilities, marketing costs,
accounting, insurance, taxes, etc.
- You have to grow gross profits 25% per year or more.
- You also have to pay-off your $200K loan in, say,
Now do it in real life and realize it is TEN to ONE-HUNDRED times harder.
Then come to HN and read posts from people who firmly believe business is driven by greed. What would you say to them to have them understand?
Right. Most who have never started and run a business have less than zero clue as to the realities and basic math one must face. They can opine all they want, yet the reality is that they simply don't have a good frame of reference. All they see is the price at the pump. And they always want to pay less.
EDIT: Layout and punctuation. Typed earlier today on an iPad, which is just horrible for entering and editing text. There are times when vim makes so much sense...
Go to a grocery store; Safeway or whole foods. Note the prices for items based on their qty/weight/etc.
Now go to a restaurant wholesale style place (not a costco, which is an illusion of savings).
A place like "cash and carry" (there is one in oakland) where the small scale restaurateurs purchase goods for sale and markup to Joe Consumer.
Look at the price difference and what you, even as a non-wholesale-licensed-individual can purchase.
Now, the price you are paying in a place like cash and carry is still a profitable amount for both cash and carry AND the upstream providers to them (distributors, farmers, whomever) - but the prices are far less than a Safeway...
So, while I think that the statement you made is true, to a point, I think that we need a revolution in what industries gouge and which don't.
Food prices are being designed to kill. (I'd love to go into detail but it just hit midnight and I have a GOT episode to rewatch)
Food is cheap to buy from a cash-and-carry because it's cheap to sell. It's sold straight off the pallet, in an out-of-town warehouse with dirt cheap rent. Average SKU value is much higher, massively reducing labour costs. Shrinkage is tiny, because of the high turnover of perishable goods and the greater security possible in a warehouse store. Cash-and-carry wholesalers still have very tight margins, but they have much lower costs than supermarkets.
Food retail is ruthlessly competitive on price, because there are so few other points of differentiation. The idea that there's a malevolent conspiracy in food pricing is utterly farcical to anyone with even a rudimentary understanding of the food supply chain.