Ever thought how frustrating it would be to want to buy a pair of jeans but then be told that they can only be bought from Clothes-U-Like?
Well, maybe it has never crossed people's minds, but limits in choice and place of purchase would alienate customers.
What if people don't mind buying some things from Clothes-U-like, but not jeans? Or maybe customers don't like shopping there because of the poor quality of service?
This is a simplistic analogy, but it depicts the daily scenario faced by independent retailers in the games market. From the independent retailer's viewpoint, exclusive distribution has forced those types of restrictions on them.
According to Clive Bishop, general secretary of the National Association of Specialist Computer Retailers (NASCR), exclusive distribution has been an ongoing bone of contention for the independent retailer ever since it was put into practice almost five years ago. "When exclusive distribution was first put forward, we saw the problems it would cause. Distributors of exclusive product have total power over a retailer's choice of where to buy product from. There's no opportunity for independents to negotiate or, dare I say it, play one distributor off against another. That's usual business competition. But there's no competition in this sector.
"For example, we can't turn to a distributor which sells games at £24.75, and say what about selling it at £24? Exclusive distribution just takes the edge from independents to negotiate - we've got no buying strength at all," he adds.
Tony Waldridge, managing director of independent retailer Kart Klub, supports Bishop's view of the distribution model. "The biggest problem is the monopoly on price. You can only really benefit if you're buying in bulk, otherwise it's difficult to get a price break. But if the big distributors and manufacturers want to keep doing that, I'm not going to stand here and keep losing money. We just buy what we know we can sell.
"And we look for alternative products and routes. We wouldn't have survived if it wasn't for our second-hand games business."
Marketing support is also an issue for independent retailers and Bishop claims that games publishers tend to neglect this group when providing merchandise support. "None of the large companies, which all have boatloads of marketing money, give independent retailers a free poster and yet the multiples seem to be somehow big enough to force marketing support out of publishers.
"We've got a situation where, if a publisher can't win over three multiples, he knows he won't sell his product. The multiples have tied, gagged and thrown away the key as far as publishers are concerned. There isn't any way of putting right the distribution model we have. The only thing we can do is bury it. Some manufacturers have indicated they would dismantle exclusive distribution, but it's too easy for them to do it this way.
"We need open competition otherwise we'll be forced to do unfair things," he adds.
Striking cooperative marketing agreements and better pricing deals, although much needed and welcomed by independents, is just the tip of the iceberg. Release date scandals and grey imports are rife in the games industry. Some argue this is directly because of exclusive distribution, while others believe it is characteristic of the industry itself.
Whatever the truth, it does seem that exclusive distribution, if not the root cause of these problems, has certainly exacerbated them. Independent retailers and multiples point the finger at each other when it comes to uncovering who has broken the official release date of a game first - and the recriminations can go on forever.
Because they have a direct line to the manufacturer, the big multiples such as Virgin, Electronics Boutique, HMV and Curry's sometimes receive the product well before the official release date of a game. But this luxury is not extended to the independent retailers, which get their stock from distributors only one or two days before the product release date - unless of course, the independent decides to source stock from the grey market.
While independents openly admit they turn to grey imports, they argue that they are forced to choose alternative routes of obtaining product because this enables them to negotiate price and guarantees, meaning that if the release date of a product is broken by the games retailing community, they can then respond immediately.
Chris Ratcliff, publisher of the Game Guide, claims: "One multiple was selling Driver on 22 June - I've got a copy of a receipt to prove it - but the game was officially released on 25 June. Another multiple sold Syphon Filter on the Friday before the release, yet no independent retailer had any stock to react to that."
He adds: "This is happening all the time. Exclusive distribution has driven more independent retailers into the grey market and breaking release dates is a symptom of it. At the moment we pay the same price whether we buy one copy of a game or 1000 copies. The multiple comes along and gets it at the price it wants. It's not fair."
Will Copeland, managing director of independent retailer One Step Beyond, says: "Only the multiples break release dates. V Rally 2 made the sales chart before it was released - how can that be? And publishers won't admit it or take any action. Every so often they are galvanised into action and say independents are buying stock from the grey market in Europe.
"But all the grey stock comes from the UK in the first place. It goes in a lorry to Felixstowe docks and that's as far as it gets. I've never broken a release date until the multiples forced me to."
One independent even claims that one distributor was penalising customers who bought product exclusive to the vendor, from elsewhere. "The distributor even threatened limits - to remove credit and delay stock. That hurts its customers and guarantees people don't want to work with it. It would be understandable if everyone was being professional, but with some games, everyone else had it before any of the exclusives did. We were left behind while waiting to get it from the distributor."
But the independent retailer's lot may not be all doom and gloom. There is a glimmer of hope for them, in the shape of a startup known as G30.
The idea was originally mooted in spring by Ratcliff who is also chairman of G30. The ultimate aim of this non-profit-making organisation, which calls itself the "independent multiple", is to overhaul the way independent retailers buy stock and to ensure that they can regain muscle in the games sector.
In essence, the idea isn't original. Bishop admits that members of NASCR have always talked about a buying group for independents, but claims the ideas that followed were never watertight. But the man really driving the G30 machine full steam ahead now is its chief executive, Tony Adams, formerly of Acclaim and Leisuresoft.
G30 has already notched up a membership of 55 independents - a figure Adams hopes will reach 150 by Christmas - with 90 branches nationwide.
It has secured deals with non-exclusive publishers such as GT Interactive, UB Soft and Empire. The independent multiple has a logistics partner, The Producers, which has responsibility to carry out all buying, invoicing, cash collection and distribution for G30 members.
G30 has already undertaken its first job as an independent multiple with the game Driver, says Adams. "G30 will, in effect, act as a central buying group for independents and build a relationship with suppliers for them.
"We want to get a better price for our members' point of sale and advertising support.
"Marketing is really important - we'll be able to offer promotions, sales figures and instore displays. We're not just going to sit there and say this is next month's promotion - we will be asking members what they want next month. If they want a Playstation product then G30 will go out and find them one.
"For the first time, games publishers can sell to the independents in the same way that they would to a multiple," he adds.
G30 will also try to encourage independents to move away from grey imports.
"We might have a product for £27, but grey may do it for £19. We'll say, it's a good price, guys, but that's short term, grey doesn't build you relationships. Of course, some retailers will always buy on price," Adams says.
Despite G30's stand on grey imports, Adams admits that if certain publishers do not want to work with them, and the grey market is the only avenue that will provide product for them to compete, then G30 will have to buy outside the official channels. "If that's the only way you can do business, then it can't be ruled out."
But he makes it clear that G30 is not throwing down the gauntlet to distributors or multiples. "Publicly, distributors say G30 is fine, but behind closed doors we know they aren't thrilled about us. We don't expect to supply 100 per cent of our members' needs. So there's room for everybody. We're just another option in the market."
Adams asserts that G30 will succeed where others failed due to its central purchasing and because the timing and mood in the market is right. Most independents agree. Don McCabe, joint managing director of retail chain Chips, says: "G30 will change the face of distribution. As a business, we probably don't need to work with G30. But it has our support because we believe in its views. G30 is about getting a better slice of the cake."
Steve Ireland, managing director of Eclipse Home Entertainment, echoes the sentiment: "It'll work. We can buy product cheaper and cut out the middlemen. It will also provide a safety net for us if we make buying mistakes, as everyone does. For example, if I've got 10 copies of some game I can't shift, I can let the other members know, maybe through an electronic bulletin board. There'll be someone that will want them, and even if it's at a lower price than what I paid for them, I'll still make something rather than lose money."
Although independents see big-name retailers as the enemy, Jim Bachelor, head of product at Virgin Megastores, was more diplomatic. "For multiples, exclusive distribution hasn't really had a big impact. I can understand independent retailers' concerns, but I can't see how the distribution model affects open competition.
"It's still far too early to predict how G30 will develop. We don't want to destroy the independent retailers, we think there should be a level playing field."
But Copeland, who is also chairman of the Network Buying Group and a member of G30, is scathing: "The multiples want a level playing field?
That's a joke. A couple of years ago I accidentally received an invoice bound for a multiple. We were buying copies of a game in units of 50s.
The multiple was only buying six copies, but £2 cheaper per unit than us. The whole thing is farcical. I'm happy to compete on a level playing field or a sloping one - but not on mount Everest."
He adds: "You either join G30 or go bust. The independent retailers have seen market share slide but we're all gob-smacked at the number of publishers that want to talk to G30."
Distributors such as Gem and Pinnacle are also anxious to see how G30 works. Peter Sleeman, managing director of Pinnacle, says: "If G30 is just about bundling up orders that we get now from the independents, asking for discounts and then dropping them into a warehouse, then it just won't fly. Moving from store front to central delivery for a couple of points margin is not going to last.
"But if it will help to sell more products and put through more orders, then I'm eagerly anticipating its impact on the market. The thing with me is that independents talk about the various issues surrounding direct distribution as if they never existed before."
He claims: "Independents can now get sale or return (SOR) deals, they are given 10-plus-one deals, they get discounts equivalent to national accounts, and they have a voice through us if they need to communicate with publishers. We're not vandals, we haven't trashed some idyllic distribution structure. We've bought them a model that's given them more visibility.
"They only have something to fear if they can't pay their bills. Something like G30 would have been harder to get off the ground if it weren't for exclusive distribution."
According to Paul Donnelly, managing director of Gem, the very word exclusive itself is problematic. "Exclusive distribution can work, you just have to watch the prices of the whole industry. But G30's aims can be applauded.
"It's going to be a rough road however, and I wish it luck.
"One reason independents want open distribution has to be because they want lines of credit. But it will be interesting to see how G30 develops and we are looking to support it. Maybe it will encourage the industry to move up a scale."
But Bishop retorts: "Our being unhappy with exclusive distribution is not only about credit, as many people keep saying. That's half the story.
Usually, there's some dispute with a distributor and you don't want to work with it or you don't agree with what it says. How then do you get round that? We are told to sort it out or we don't get any product."
Bishop's view, however, finds no favour with Jonathan Kemp, managing director of publisher Eidos, which has an exclusive agreement with Centresoft.
He approves of G30 and is adamant that exclusive distribution is the best model for the industry. "Before, product was delivered in a haphazard way. Now we can track our products, react quickly to any changes and do a better job all round," he says.
"Broken dates are the bane of everyone's lives, but we're working with Elspa to try to alleviate the problem. The onus is on publishers to resolve that problem, and if we find that someone has broken release dates, then we tell them to stop it. I don't think multiples are stronger and vice-versa, so there's no need to wrest power back from the multiples."
He adds: "Although there were teething problems with exclusive distribution, everyone realises the benefits now. G30 is the next step in what's happening, it doesn't signify a break from anything. It's a conduit for pricing discussions, and independent retailers need a voice and a level playing field. Everyone is mature enough to realise changes need to be made."
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