Numbers of Wave One Core and Expansions manufactured

[wilycoyote]

As the deadline for the Reward Exchange and sale of RTT product expires , can I ask and get an answer to what is to many besides myself a very legitinate question?

When Wave One was produced , exactly what were the numbers of Core and additional boxes paid for and manufactured. IN addition did palladium pay for any extra templates, decals and card packs, if so what were those numbers.

I am asking as it does appear frm the numbers and pictures shown that Palladium did have in their warehouse a very large number of pallets each containing RTT product, which does and was well in excess of that required to fulfil the backer pledges.

This extra production must have been paid for and as such was presumably a extra drain on the Kickstarter funds at that time. What is not clear is whether or not that payment was taken from monies suposedly set aside for the wave 2 production that was to have followed shortly afterwards (Palladium's updates confirm this was the plan ).

Of course there has already been havt speculation about these numbers and there effect on the ultimate fate of the project and so it would seem to be something that Palladium need to completely address to quash any false allegations being made against them

[übermensch]

Outside of a lawsuit, these facts will never be known. Palladium is not known for their transparency. Honesty is the best policy but it’s too late for that now. The only thing honesty would get Palladium now is more liability.

It’s just a sad situation all around.

[Morgan Vening]

We know the number of Cores, from Update 155.
3 boxes per case, 5834 cases = 17,502 Cores

And while there's no numbers on MOST of the expansions, we know according to Update 160, what the number of Spartan/Phalanx Expansions were.
12 boxes per case, 384 cases = 4,608 Spa/Pha Expansions.

Given that the Spa/Pha weren't an integrated set (ie, didn't come in the Core, like the Artillery Squad), this may have been above average, but I'd be shocked if it was more than twice what the others were, so that puts the math at at least (2x4608)+(4x2304)= 18,432 at a bare minimum, IMO. And as many as 27,648 if PB ordered equal amounts of each Expansion.

It's too bad the other photos in those Updates weren't a higher resolution (in particular the second one), so that you could read what was on the sides of the towers of cases.

EDIT: It's theoretically possible that there's more than that, as the Battlecry expansion bag is well short of what was necessary to fulfill Wave 1 (6x360=2160, which wouldn't even cover people in for a single Battlecry), but the Cores and the Spa/Pha have the final total printed on the box, rather than handwritten in on the BCEB.

[wilycoyote]

Thanks Morgan, I hoped you were lurking as between yo and Forar the numbers get crunched and saves me headaches.

So it would be reasonable to say that around an extra 10k core boxes were produced at a cost of roughly $450k? This sum would seem to have been more than enough to fulfil the wave 2 commitmrnts, but in effect Paladium tied it to a unrealistic and highly optimistic projection of retail sales. A the money had been used and even after a year it must have been obvious that it was never going to be recouped, the writing on the wall must have been writ in big letters even three years ago. This begs the question what were Palladium holding out for, the most liikely was a new film but in reality that would be new models rendering these sculpts useless.

Bottom line is that Palladium appear to have taken a serious misstep with what amount to over a third of the funding available, which immediately put wave 2 production in serious doubt, with no real plan of how to dig themselves out of the hole. It also menat that any chance of funds being retained for backer refunds in the case of a very possible failure to deliver had also been locked away on this massive business mistake.

Sadly, it is the backers who are being asked to carry the burden of this mistake and not Palladium - at leas not financially.

So , this does seem to present a case and an opportunity for Palladium to just be open and honest about the decisions they took, not trying to hide what were their own massive failures in this and come clean to the backer community.

A proper apology to the same backers, not tinged with the "we too are creestfallen, we are upset as well" rhetoric, but simply saying sorry for not delivering and not making provision for refunding monies should be made.

I accept these numbers are conjecture - but likely very close to the facts - and so if we are wildly off the mark then again it behoves Palladim to come out with the actal numbers and put us straight

[Forar]

The rule of thumb I've always heard was that you have your base price (manufacturing, shipping from the production facility to you, at least some design stuff, etc), then you double it for wholesale, and then double it again for full MSRP.

If they were paying $45 per box, their margins would have to be VERY slim, because CSI was selling them for ~$70, which wouldn't leave much room for profit margins for either them or PB if production was taking up ~2/3 of that from the start.

Yes, some companies like Walmart and CSI will sell at a steep discount to try to make up profits in quantity over a higher margin per individual item sold, but that requires moving a lot of stuff constantly, and at the end of the day you don't want to have thousands of dollars of stuff rotting on warehouse shelves for too long.

Another side to it is that one can often see savings in terms of Economy of Scale. Where, for example, getting 200 of an item only costs 1.5x that of getting 100 of them. You're still paying 50% more, but to get 100% extra stuff, meaning you average out the cost to 75% per unit across the whole run. I've seen it in a friend getting calendars made for a business, getting challenge coins made for a group, if one isn't careful it can be easy to talk yourself into a point where they're almost paying you for the extras, though with something as large as the core boxes, obviously shipping would increase substantially as well. This is all to say that if they'd instead decided to get 8 or 9k cores; just enough for backers and *some* for retail, it might have cost more than 1/2 the price they paid in the end. Obviously this wouldn't excuse overextending, especially if backer funds were used to pay for the excess retail stock, but even in a perfect scenario where PB paid for the extras with their own funds, and any extra shipping with their own funds, it could still be the case where there were consequences of a larger run (delays, getting the slot, any other fees or costs that needed addressing, things we may never know about in detail).

To be clear, as anyone who has seen my posting should know, I'm not so much defending PB's actions (presumed or actual), as trying to add layers of consideration, as trying to suss out too much using too little info can lead to some complicated and frustrating conversations.

Edit: I should note that the numbers used regarding economy of scale are entirely for making the point. They can be substantially more dramatic. Said friend who got calendars, was able to get something like 300 of them for $X, or 1000 of them for like $X+30 or something. Often a lot of the cost is in the setup, once production is running, the labour and materials can be a pittance in comparison, and for some companies it's somehow more worth their while to get a standard order size than have a bunch of little one-offs to handle all the time.

[wilycoyote]

Thanks Forar, that is an interesting take on the process.

So following this line of approach , we can speculate that the actual profit margin on each set was relatively low and ceratinly not a big earner unless you were selling in large quantities.

That being the case then it is a little strange that the decision was made to go all in with the attempt to over spend on wave one in order to finance wave 2. Especially given the large number of potential buyers had likley been involved in the Kickstarter, The gam ewould have to be really special to be a major independent release and let us be honest it was far from that and the bad tatse of te likes of "Spartangate" could not have helped.

Okay we have the benefit of hindsight but the extra production of wave 1 does not make sense on any level. It was very unliklel to make its money back and effectively put an immediate heavy roadblock in the way of wave 2.

It would seem to me that if there was any sort of project management this would have been a red flag well before it was authorised and the fact that is was green lighted either shows a complete unawareness of the risks or a laiissez faire attitude because it was not actually Palladium's monies at risk.

[Morgan Vening]

So following this line of approach , we can speculate that the actual profit margin on each set was relatively low and ceratinly not a big earner unless you were selling in large quantities.

There is an exception here, and it kinda points to something that's been an issue for a while.

That exception being, profit margins go up SIGNIFICANTLY if you direct sell. Using Forar's ratios, manufacture/ship for $25, wholesale for $50 = $25 profit for PB (minus some overheads). But selling direct means $25 for manu/ship, $100 for sale = $75 profit (minus slightly more overheads having to deal individually, rather than by the pallet).

One thing that's not mentioned much, but has appeared to be consistent, is PB's issue with distributors carrying their stock. Yes, there are some game stores (brick and online) that buy the product, but most of them seem to buy from PB direct. Whereas a true distributor network does reduce the profit on a per box, but which could get it into a lot more stores.

As Forar points out, we don't know how much they paid per, but the numbers from PB definitely make it look like something hinky was up. But without PB volunteering (or being forced to) offer that information up, it's always going to remain a question mark.

[wilycoyote]

Okay that makes sense, so is it possible to suggest the potential breakeven point were they would have paid back the monies "borrowed" from the Kickstarter funds to fund the retail boxes?

If I start with some basic napkin math, then the production costs were stated as being just over $500k - this should have included a lot of wave 2 development as well but let that ride for now. Given the above I think 10k boxes at around $250k would seem to be a realistic costing for retail , so $25 a core box (as I said napkin math),. So to break even Palladium needed to sell some 2500 boxes very rapidly to replenish the monies taken. This seems a very tall task and this still does not yet generate any income for Palladium.

I believe this kind of corroborates what we have been suggesting for a few years that palladium overreached themselves with a totally unattainable goal for retail sales, that we now know hamstrung any real possibility tof producing wave 2, effectively they had spent the money already. That said retail sales must gave generated some income, after all we nknow boxes were being sold at Gencon and at their store, Even if this was as low over the three and a half years as a 1000 and given this was monies not funded back to the Kickstarter pot - they did not evidence this in the pie chart - this was $100k income direct for Palladium, monies tryly they owe to the backers but they are denying that they still have, it leads to the obvious question what were these funds spent on.

Even more damning , at least in my opinion, is that if even this partial amount was not fed back to the main KS fund, then it can be argued with some conviction that knowing the financial position,Palladium had no intention on completing the project. To my mind there is a lot of evidence that RTT was being used as the financial prop to keep things ticking over at Palladium and considering the "firesale" of the last few days, this still might be the case