Project Independence

This is something William wrote a while back as we two try to find ways to expand our opportunities. It’s something worth sharing.

I wanted to make a separate email for starting this brainstorm and planning session so that it would not get lost in a longer email.

Goal: To reduce Avalon’s independence on any one particular company.

Objective: Given the over-dependence that Avalon has on OBS, the primary objective of this idea is focused on building independence from OBS.

Purpose: Dependency Theory of Power demonstrates that as we become more dependent upon OBS, and have fewer alternatives, OBS gains additional power over Avalon. We consider this to not be an acceptable trend.

Limitation: We do not want to reduce our dependence on OBS in the short term at the expense of long term growth. We believe that we should exploit viable opportunities (including from OBS) in the short term to help build our independence in the mid to long term. We recognize that, paradoxically, more dependence in the short term can reduce dependence in the long term. We also recognize that reducing OBS power over Avalon by increasing OBS dependence on Avalon is not a likely outcome.

Some brainstorm ideas:
Build cash reserves: Cash provides more than the ability to seek out additional opportunities, it also has an intrinsic value to the company. As the company has more than required cash to fund operations and planned expansion, the company is able to take more risks that can reduce dependence upon any other company.

Other retailers: While we need to becareful about becoming too spread out (there is a cost to being everywhere), we should look to invest in our efforts to gain a presence on other sites. For example, we can do more to promote our presence on e23 (which are higher quality sales–meaning we get a higher profit margin, and thus more money from the same sale on e23 as we do at OBS), or YGN, or Paizo. As we support these e-tailers, we can seek out ways to reduce the percentage of our sales that are made via OBS (by trying to grow our sales at other sites). Some of the costs of this might be offset (and the impact enhanced) by doing some joint promotion with the owners of those respective stores.

Build independent contact with our customers: This is self-explanatory good…:) However, in terms of helping us build more independence, this can be key. OBS is able to charge what they do (35%), and really could increase their share if they wanted because of their market share. The value they bring to carrying our products can be found in one basic area: They bring customers to our products. They act as an intermediary between us and potential customers. As we build a stronger connection to our customer base, we can grow our independent customer-base, and therefore reduce some of the dependence we have on OBS. Obviously OBS’s ability to bring new customers will continue to be very important to us and we will not eliminate our dependence, but we can work to reduce the dependence by building more direct relationships with our customers.
Long term goals outside of PDFs: In the long run, we can also look to expand outside of pdfs. We will want to stay in this industry, but we will be expanding out into print, non-RPG publishing, etc. The expanded business will continue to make us less and less dependent upon OBS.

Well, that is a start anyway…

William

As you can see William is the brains behind this whole Avalon Games thing. I think he just keeps me a round because I’m good looking.

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