Wayland Games response to recent news of GW trade terms changes

By tgn_admin
In News
May 22nd, 2011
21 Comments
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Wayland Games have posted a response to Game Workshop’s recent change in their terms and conditions for retailers.

From their website:

Hi Everyone,

Before we start, if you’d allow me to present a little background about Wayland before we get into the meat of the issue I’d be grateful.

We laid out our little web store back in August 2008, our beginnings were humble, with my brother and I packing orders in a spare room. It wasn’t ideal but it was what we had to start with and we grew and grew through the continued business of our loyal customers through four warehouses to our current location. In thirty three months we have gone from a spare room in Essex, UK with my brother and I packing boxes to a global operation with fourteen full time staff which is now positioned as one of the largest if not the largest independent hobby retailer in the world. We run our business today as we always have done, in a professional and ethical manner both within the letter and the spirit of the law. Almost all suppliers like us, customers enjoy our openness and service-oriented outlook and whilst we’re realistic enough to know we’re not by any means perfect we will always strive to improve to ensure our central tenet of great prices and better service.

Managing such growth has been far from simple; we have experienced growing pains like any business in any sector that has exploded in market share terms. Our growing pains have also been more painful as we continually seek to adjust to a shifting commercial landscape from our dominant supplier, Games Workshop. Like many of you, I believe that Games Workshop produce a fantastic product which gives endless joy to countless people. I am proud to be associated with them. Unsurprisingly, therefore, I read with real concern the statement by the CEO Mark Wells over the new trade terms which effectively prevents us selling Games Workshop supplied products outside Europe. Mark’s statement can be found at: http://www.facebook.com/notes/games-workshop/our-changes-to-european-trading-terms/227996923881812

Mark seems to be clearly of the view that on-line retailers (and we are not purely that, of course given our bricks and mortar presence) “free ride” on the back of Games Workshop’s bricks and mortar outlets. We have sought over the years, and I thought with some success and recognition, to demonstrate to Games Workshop the value that we provide not just in terms of sales but also in terms of pre and after sales service (not to mention our activities at trade fairs), which is clearly equivalent to the service that is provided on the “ground” by bricks and mortar outlets. Quite aside from the legality of Games Workshop’s actions, we are confused by the commercial attitude of Games Workshop which hampers our ability to sell to hobbyists to the clear disadvantage of both Games Workshop (albeit maybe not their retail arm) and the hobbyists themselves.

I will not air anyone’s dirty laundry in public. Therefore, I am writing to Games Workshop separately (its board, lawyers and their principal shareholders) to share my concerns in greater depth. I hope that commercial common sense will prevail and that we can continue to work with Games Workshop to expand their market and bring a great product to as many people as possible at the best price possible. After all, Games Workshop not only has a clear responsibility to the market but also a clear responsibility to its shareholders (which, after all, could be you and me!).

In the meantime, we believe after the announced terms are implemented we shall be able to continue to offer all of our loyal customers the same product range that we offer today. There may be a small lead time to implement but we’ve been given a rather short period to react. We will comply fully and completely with the new terms and conditions of sale imposed upon us and will not contravene them in any capacity whatsoever (albeit we would not wish that to be seen as acceptance of their legality), all we seek to achieve is that customers both old and new are able to benefit from our view of the market wherever they are located. We all love our hobby.

Over the next few weeks we’ll be providing updates as to how the process of implementing these changes is coming along, the chances are we’ll use Facebook to disseminate this information as it is a great platform for customers to interact with us and each other.

We look forward to continue to serve you and we always will.

Keep on Wargaming.

Richard.
Wayland Games

  • Kaine

    Interesting read, thanks for posting this.

    I find it very interesting you seem to be suggesting that you have found a way around GW’s terms to be able to continue to supply people outside europe.

    “In the meantime, we believe after the announced terms are implemented we shall be able to continue to offer all of our loyal customers the same product range that we offer today.”

    Now a few of us have been talking and technically i guess it would be possible to create a separate company, lets say miniwgames, which isnt a GW direct retailer, then supply that company from the main company with product at a close to wholesale price. Then use that mini company to supply people outside Europe.

    It would be interesting if you were going to use that approach, i cant see GW not being smart enough to work out 1+1=2 and stop supplying any parent company doing that, not sure on uk law, but i dont think they have to sell to you if they dont want to (ala Battlefront and Mael). (forgive me if i’m wrong but thats the only way i can think of you could avoid the gw terms).

    Personally, i’m not sure whether i like gw’s new terms or not, the price rise annoys me more, the terms dont effect me personally, and i can see the point of GW’s move, i mean imagine a russian online retailer could sell to the uk at a high percentage off, the uk independents wouldnt be happy and would ask GW to do something about it.

    The real issue the consumers are upset about i think, is not that they cant buy from wayland,maelstrom etc, but that the prices are so whack out in the overseas areas its just crazy, if the price was fair, i dont think we’d have this issue.

    On the subject of Wayland, sorry to say i’m not a fan, i know you guys are trying hard to improve, but once burnt forever avoided, i think once you get a new webstore running (that doesnt have “unlimited” inventory in some categories) i’ll give you another try, but for the moment i dont trust your inventory.

    However, good luck with the plan you have 🙂

    • Zac

      I find it very interesting you seem to be suggesting that you have found a way around GW’s terms to be able to continue to supply people outside europe.

      They might just think that the terms are illegal and are wiling to fight them.

      • Kaine

        Wouldnt GW just say “find we wont supply you”, while their may be free trade laws in the eu and uk, i dont think any of that forces them to supply you if they dont want to.

        • Zac

          If the underlying cause of the breach is not legal then I don’t know that GW would be in a position to stop supplying Wayland. Its also a probable breach of anti-competition rules.

      • They might but I doubt it. I think EU laws (with some exceptions, example paying bribes) only operate within the EU. One argument round that it is a restriction within the EU. So if I sell it to a trader within the EU, they should then be entitled to sell it anyway they like, to whom ever they like. However we have already seen GW stop traders selling on eBay, Battlefront selling to Maelstrom and now GW stopping rest of the world sales. Seems like the boot is on the foot of the manufacturers. Perhaps an OFT investigation is needed.
        Mr Wells comments about currency rates are nonsense, it is of course why currency changes, as the currency grows stronger it is harder to export and easier to import. So it has just become easier for Australians and New Zealanders to import from other places, thats economics.

        • Zac

          However we have already seen GW stop traders selling on eBay,

          I suspect that most of that was done with copyright complaints to eBay

          Battlefront selling to Maelstrom

          A slightly different case. Battlefront was, IIRC, saying that Maelstrom was breaking an agreement not to sell at more than a 10% discount. I don’t know if GW has anything like that in place with their retailers

          and now GW stopping rest of the world sales.

          The main problem here is, as you mentioned, that an EU company is telling other EU companies to not sell overseas in order for GW to prop up business in their ROW retail businesses.

          And frankly I don’t know how GW can say they are trying to help retailers since it isn’t stopping US online retailers from selling at a discount to North American companies or EU online stores from selling to EU residents.

          GW only seems to be interested in helping retailers in areas where GW is mandating prices that are dramatically out of line with “real world” prices.

          So if you are a brick and mortar store in the UK, US or Canada then GW doesn’t seem to care about your sales being lost to online retailers but they do care for places where they are set to make an enormous amount of additional money from sales to customers who are now being put into a position of either doubling or tripling what they paid for goods or no longer buying new GW product.

          It seems incredibly self-serving and a real slap in the face to other retailers who are still suffering from seeing their sales lost to online stores.

          • GW stopping internet sales was really simple, stop supplying them, thus
            “We would like to draw particular attention to stockists that re-sell our products via distribution channels that fail to meet our quality standards. As our terms state, we will not be able to supply any stockist that uses these distribution methods (i.e. located in non perminent premises or utilising internet auction sites) to re-sell Games Workshop products. ”

            Regards Maelstrom, again it was because they did not count as a Bricks and Mortar store, according to Battlefront. Anything people might have read concerning dissatisfaction about pricing policies was not mentioned in the notice of termination of supply.

            GW have indeed shown that they ‘care’ (if that is the right word) the new discount structure maximises the discount for B&M stores and those that hold events. If you just try and sell stuff, (riding on the back of GW success) then you get less of a discount, which constrains the discounts you can offer in a deeply meaningful way.

  • Psychotic Storm

    Good luck in their fight.

    GW in general enjoys its bulk to enforce their decisions even if they are legally questionable, they rely that the ones they bully are not big enough to challenge them, they also beleive they are so great somebody without them cannot survive.

    I hope they manage to put GW in their place, because what they did this time is beyond atrocious.

  • Tor Gaming

    Generally, a company doesn’t have to supply another company (just as a shop doesn’t have to sell an item to you if they don’t want to.)

    But, it is never black and white. It could be that Wayland are going to push back by citing ‘Abuse of Position’ under article 82EC of the EU Commercial and Competition law.

    That states that refusal to supply is an abuse when it is an action taken by a dominant company in order to stifle competition.

    Law is never an easy thing to understand, which is why Wayland seem to take their time and consult lawyers. The best course of action for them IMO.

    • Zac

      Generally, a company doesn’t have to supply another company

      Except in this case GW has an existing business relationship with the companies which would complicate that

      I’m curious how it is legal to change the terms and conditions of a business relationship without consent from the other party though

      • deedoublejay

        There’s probably a clause in the initial agreement that says GW has the right to change the terms with X days notice with the retailer’s only alternative being to opt-out.

      • Tor Gaming

        Except in this case GW has an existing business relationship with the companies which would complicate that

        Not really. Like I say, it’s not black and white, it’s many many shade of grey. There can be any number of reasons not to supply another company.

        Obvious reason are failure to pay invoices etc but also you can stop supplying someone after changes of your T&C if the retailer doesn’t agree to them. That’s where it really gets grey because the Law isn’t straight forward.

        GW could cite the fact that as EU companies are not brick and mortar stores in Australia, New Zealand etc and therefore GWs business is being damaged as they rely on getting new players in through the doors of their hobby centres. It’s an argument that can stand up to scrutiny of the law makers too.

        How that sounds to the rest of us is irrelevant though as it’s how it sounds to the lawyers that will decide it.

        I’m curious how it is legal to change the terms and conditions of a business relationship without consent from the other party though

        Not sure about anywhere else, but over here you can change your T&C anytime as long as notice is given. We can change our T&C with 30days notice to our trade customers. That gives them time to object/appeal to the change.

        How many times has your credit card T&C been changed? Mine has been changed about 3 times in the last 12 months……….

  • Mechanical.Horizon

    I still wonder sometimes why stores and resellers don’t just tell GW to stuff it and stop selling GW product.

    Yes I know how naive this sounds, but part of the reason GW is so big is that these stores also help to promote GW product.

    If they stopped selling GW product and started promoting other games they could probably recover the lost revenue.

    I still think that’s something GW doesn’t really consider. That these stores and retailers essentially “free advertising” for them.

    Just start promoting other games and move on.

    • Zac

      I still wonder sometimes why stores and resellers don’t just tell GW to stuff it and stop selling GW product.

      Because they can still make money at it or they think they need to carry it to make money.

      I know several shop owners that still talk of GW products being the majority of their sales.

      Just start promoting other games and move on.

      Well maybe move on once you’ve got your regulars buying other games 🙂

    • deedoublejay

      “Just start promoting other games and move on,”
      GW’s still the biggest fish in the pond, by far, despite the success of companies like PP and Wyrd. I did a survey for a school project a couple of years ago: 1 out of 3 people said they bought GW, 1 out of 5 said they bought PP, which was the closest. GW product attracts a lot of people, and if you don’t have it, they won’t even come to see what else you have.

      A single store refusing to sell GW would have no effect. They’d laugh and open a Hobby Center. It would take a large, organized boycott by independent retailers to make them notice.

  • Osbad

    Kudos to Richard for handling this in such a professional way.

  • puster

    Well, perhaps Maelstrom buys the “international” stuff for Wayland and sells them to them (and vice versa from Wayland to Maelstrom). Now they have SOLD their GW stuff to a local vendor, and bought their international stuff from another trader, not GW.

    This surely will add a layer of taxes (UK thanks) but will probably still be desicively cheaper for the international customer then buying directly from a local GW retailer (or not, I have no idea how much the UK taxes would be on that one…)

    I am not sure how far reaching GWs treaties go, but… ultimately they will have to decide wether to scrap resellers and shop directly only, or wether they will be mainly a supplier of miniatures. Drawing artificial lines in the internet sand will not work.

    • If you register for VAT you can claim back the VAT you have paid and if you sell, you collect the VAT for the government. Outside EU sales, no VAT, so doing business that way the prices could be even cheaper, Hurrah!
      I might have mentioned elsewhere but GW financial results show that about 52% of GW product is sold through the indies. GW shops and internet sales etc make up 48% (although they make more money as they are getting the retail price for the goods).

  • Seems strange that one UK company can order another UK company to cease export.

    All governments are huge fans of export…

    • They can’t stop the exports, but they can stop selling to any company they want.

      To get a sales account, you sign an agreement that says “x, y, and z.” If you break X, you aren’t allowed to buy anymore. Hence, GW has these stores where it wants them.

      GW says, If you want our product, you’ll follow our rules.

  • ninja007

    Best for all concerned would be for GW to cut loose the failure that is their own “GW Hobby” stores and get with the program. They are simply one more, not particularly remarkable minis maker in a sea of minis makers. They are terrified of actually having to compete in a free market and this is all, in the end, just more nonsense meant to avoid that and keep a captive audience. It has never worked and can never work.

    It’s shame they don’t actually believe they offer any value or outstanding quality, because they do make excellent miniatures that I believe would rise to the top even if they didn’t have the whole laughable, unstustainable “we are the only game company there is” crap attitude that has failed so hard, so long, in a business sense.