WizKids has been waging a campaign against discounting by online retailers of its products.  At Origins, it introduced a GAMA resolution to ban online discounters from the floor.  At GenCon, following up a lead from a retailer, we asked WizKids Executive Vice President Martin Stever whether WizKids was telling distributors not to sell to online retailers.  His answer was short and to the point.  'No, that would be illegal,' he said.  One change that WizKids is making to its distributor trade terms for next year is that it will no longer allow distributors to sell to sub-distributors, but only to retailers.  This change is not related to the discounting issue.

 

On the other hand, Stever did say that WizKids was using its 'bully pulpit' to try to reduce online discounting.  He feels the key tier in that effort is distribution.  'Distributors could stop it if they wanted to, but they're afraid if they don't do it [sell to online discounters] someone else will.' 

 

We asked how big a problem he thought it was.  'For a lot of retailers, sales are up this year but profits are down,' Stever said.  'It just leaves money on the table.'   Stever also stressed that he believes that online discounters don't generate new customers, they simply took business from brick and mortar retailers.  'No new customers ever came from on-line retail,' he said.  And with 8,000-10,000 brick and mortar stores carrying WizKids products, the argument that online retail fills in geographic holes in distribution was not one he was buying. 

 

One online retailer we talked to said he sold WizKids starters and boosters at narrow gross margins to attract customers that then bought more profitable singles.  'Starters and boosters are like milk to us,' he said.  Whether the online business model is sustainable does not seem to be the issue to WizKids, however; it seems to oppose discounting whatever the reason.