28 August 2017
I tried to think of a sexier name for this post, but I didn’t want to mislead anyone into thinking this is more exciting than it actually is.
A few days ago, someone wrote to me with a question about the basics of the board game supply chain. As it turns out, even though I discuss these different elements on various blog posts, I never link them all together in one place. Until today.
Here’s the supply chain list, roughly in order of operations. This system may vary depending on the publisher.
- Publisher (the person/company who coordinates the creation of the product, along with project management, marketing/advertising, and customer service; e.g., Stonemaier Games): The publisher is the lynchpin for the entire process, as most of what they do is outsourced.
- Manufacturer (the company that coordinates, prints, creates, and assembles the product; e.g., Panda Game Manufacturing): Most manufacturers do some amount of printing in house, but they often outsource the creation of specific components to a variety of different factories. This results in a key parts of their job being the vetting of those different factories and the final quality check and assembly.
- Freight Shipper (the company that coordinates the shipment of the product using boats and trucks; e.g., OTX Logistics): Freight shipping companies typically don’t own the boats or trucks; they just coordinate that process.
- Distribution Broker (the company that coordinates the storage, sale, and shipping of games to distributors; e.g., Greater Than Games): This step varies quite a bit depending on the company. Larger companies have their own warehouses and sell directly to distributors. Kickstarter-driven and direct-to-consumer companies will often have most of their inventory shipped to fulfillment centers that package and ship their rewards to backers. A distribution broker acts on behalf of a publisher to handle transactions with distributors, especially if the publisher wants to sell to many distributors around the world.
- Distributor (the company that sells and ships games to retail stores; e.g., Peachstate Hobby): Distributors buy games in bulk, usually at a 60% discount. They have specialized inventory systems to deal with an array of orders from hundreds or thousands of retailers each week, as well as sales and warehousing staff.
- Retailer (the company that sells games to consumers; e.g., Game Nite): Other than the publisher itself, retailers are the only entity in the supply chain that sell games directly to consumers. Retailers can be online, local, or both. Unlike some other industries, if a retailer stocks a game that doesn’t sell, they’re stuck with it–they can’t return it to the distributor or publisher.
- Consumer (the person who buys the product): Even though the consumer is at the very end of the supply chain, they actually have the most power. If a consumer wants a product, all they have to do is tell their preferred retailer. A good retailer will try to buy the product from a distributor. If the distributor doesn’t have it, they’ll often tell the distribution broker or publisher that there’s a demand for the product, which can be the catalyst for a new print run.
One observation as I wrote this: The entire supply chain relies heavily on trucks. Trucks are the connection between each of steps 2-7. Fortunately, truck drivers are decentralized, meaning that the system still works even if some truckers stop working. But if anything causes ALL truckers to stop working for even a short amount of time, the entire system grinds to a halt. Let’s hope that doesn’t happen.
Is there anything you’d like to add to or clarify in these descriptions?