So why is fulfilment going away?

So why is fulfilment going away?

I want to give context on the decision to end our fulfilment services. It’s a big topic and one that’s kinda central to the way we’ve been making money. Let’s start at the top:

Reasons we provided fulfilment in the first place:

• Brand building. We’ve sent several thousand packages in the last year, all of which carry our logo and store details. I like to think that PCP has very quickly become a large presence in the RPG scene in the EU and UK. We’re at all of the key UK-based conventions and we carry one of the biggest selections of TTRPGs on this side of the ocean because most of the RPGs coming into the EU and UK go through our hands.
  
• Economy of scale. Until a few months ago, all of our fulfilment and storage happened out of Hugh’s garage. That quickly became unsustainable: we ran out of space and time to actually take care of everything. So we moved all of our stock over to the folks at UK Fulfilment. They stored everything for us and performed the labour of packaging and posting our orders and the crowdfunding projects we took on.
• I think it’s important to also mention how fulfilment costs break down: we pay two bills to two separate companies. One goes to UK Fulfilment for storage and labour, and the other goes to Royal Mail (and other carriers we work with, like Parcelforce and DHL) for postage. Both of these contracts are based on volume: the more we send out, the lower our unit costs. By taking on fulfilment work we could, in theory, have lowered everyone’s costs.
• There was a need for it. As it stands, getting your work into the UK and EU is a nightmare. If you want to avoid arcane import taxes and handling fees, you have to collect tax at point of sale and remit it to the appropriate authority. Obviously, we’re a tiny co-op and we don’t have the infrastructure to get in touch with every member state of the EU to send them the odd £5 here and there. Neither does any single creator printing 70 copies of their ZineQuest project! 

I think fulfilment is a crucial bit of infrastructure the scene needs to be able to flourish. Facilitating the cheap movement of books across borders could literally enable creators to make a living by selling books worldwide. The US is quite good at this already: the market is bigger, and IPR and EF are big players which can sustain a modest livelihood. The EU and UK have nothing like this: Asmodee has no interest in indie RPGs and hobby shops here don’t have a central network to reliably order books from. We’ve been making progress here with providing wholesale to at least three shops semi-regularly, but it’s slow work that’s based on relationship building and showing to shop owners that 1) this stuff can and does sell, and 2) can be a better investment than your run of the mill D&D books.

Reasons we’re stopping fulfilment:

• Brand building. With sending out several thousand packages a year comes the responsibility of sending out several thousand packages a year. We set up PCP with the intention of publishing our own work, not running a logistics company. As we took on bigger projects, we came up against questions better left to people who want to run a logistics company (like, who’s liable for stock if it gets damaged?). Relationship management gets tricky at that scale too: once you’re handling projects in the thousands, something going wrong can put creators out of a lot of money. We’ve had to make decisions about the viability of projects that then got publicly critiqued. This might sound like a bit of a cop-out and a “woe-is-me, I’m getting bullied boo hoo” situation but frankly, we’re just not at the stage where we can weather things going wrong.

• Economy of scale. No longer being able to handle the labour ourselves, we were at the whim of other people’s pricings. Pricing which is fair, but which also makes the other company profit. A common complaint we heard from our fulfilment clients was that the price was just too high - especially reflected in complex projects with a lot of SKUs. One thing you find out very quickly when dealing with logistics is that add-ons are a nightmare. Scope creep is a nightmare. Every permutation of order you add to your Kickstarter becomes an exponential cost. This is fine when you’re working in low volumes and willing to do the work yourself, less so when you have a warehouse with people having to pack a high volume of slightly different variations of items. We negotiated better, lower rates, and we entered a contract with Royal Mail which gave us better shipping rates thanks to our volume. Our margins were, nonetheless, razor thin (about 5-10%) and to make them healthier, the volume we’d have to hit was in the 100s of thousands of packages per year. I don’t think there’s that many RPGs being printed, generally.

• Operational complexity and landlordism. Coming off the back of the above, a lot of Hugh’s time was spent juggling spreadsheets. Data from Kickstarter and Backerkit and any other platforms folks were using had to be converted into a format our warehouse could understand. Hugh tried to alleviate this by asking creators to reformat that data themselves which was mostly a poor experience for the creators (what even is a SKU?). As more projects came in, the processes to handle them did not scale: each project needed its own attention while not making us enough money to even cover spending the time on them. The other benefits, like volume discounts and brand awareness, likewise didn’t really translate to us making money. Ideologically speaking, I think a lot of the work we did here was akin to landlordism: creators can go directly to UKF, set up an account, send over their spreadsheet of data, and get them to handle fulfilment without having to go through a “middleman” like us. I think there is a value-add possible here where we handle the process from start to finish but, generally speaking, a lot of this work revolves around passing information between two parties. 
• Another point worth mentioning is that charging for shipping is kind of a nightmare. There are ways around it: Backerkit lets you charge for shipping close to your actual shipping date, which means you can charge the appropriate fees. But, Backerkit is expensive. We tried to get around this with code Hugh had written to issue Stripe invoices to backers; backers would get an email outlining their fees and they could pay it by popping their card details in. The downside here was that folks thought this looked like a scam: to backers without experience of us, or Kickstarters in general, an email asking for money which claimed to come on behalf of a creator is actually a little suspicious. The benefit to us, having not charged for fulfilment at all, was that we could give people discount codes for our store. This meant about 1-2% of backers would actually come to our store and buy something extra to save on shipping. This, generally, was not enough to actually make it worthwhile.
• Our IOSS provider went out of business. This felt like the final nail in the coffin. Realistically, the people left at PCP aren’t logistics experts and not even being able to provide a useful, expensive service like IOSS means EU customers are back to paying high import fees on anything they buy from us and anything we ship out for Kickstarter backers. Finding another IOSS intermediary is a big job and it’s expensive.

In theory, the benefits of volume and a single entity like PCP managing relationships with a lot of the scene could have been a good way to share knowledge and build out infrastructure for the whole scene to benefit from. In reality, it ended up a massive time sink with tight margins and a lot of legal responsibility a tiny entity like ours wasn’t ready to handle.

Nonetheless, I would like to think this isn’t a complete and final no from PCP. I feel a deep responsibility to the scene to figure this stuff out. We deserve a place better than Itch and DriveThru to sell physical games, and international fulfilment shouldn’t be such a scary endeavour. It’ll take some more working out and we might be back in the future with a better process to handle this work. I think charging creators up front is the most simple solution to this (consider that we provided all of this at no charge to the creator whatsoever, which is why we tried to encourage creators to self-serve as much as possible using our documentation) but, as it stands, it’s been over a year since we published anything of our own. It’ll be nice to think about that again, for a while.