Q: I recently published a game, and I’m wondering how to figure out what I should charge for it.

I recently created a card game and am looking to start working with small re-sellers and shops in my area, but coming from an art background, I do not know how what to charge for orders. Since your company works with retail stores, I was hoping to get some insight on how to proceed. I know what it costs to make my games, and I have a price that I have been selling it at to customers directly. My question is: when selling to a retail store, what is the typical percentage you discount each unit, or does it change depending on the game? And is that discount a percentage of the total MSRP [Manufacturer’s Suggested Retail Price], or a percentage of the remaining profit after the cost of manufacturing is deducted? I have done some research online but have not come across a clear answer. Any information you could provide would be a great help.

A: When we were trying to figure this out, we got various recommendations about what ratio you should set for the price relative to your cost.

What I recall is that a 7:1 price:cost ratio is good, but 10:1 is what you want to aim for. So, for example, if your game cost $1 to make, then to get a 7:1 ratio, you’d decide that the lowest cost you were comfortable selling it for would be $7.

So, moving on to discuss the difference between the MSRP and the price per unit to stores, a 50% markup is pretty standard, which is the same thing as saying that retailers get a 50% discount off of MSRP. So if $7 is the least you want to sell for, then that’s your retailer price, so your MSRP would be $14. Note that if you plan on eventually selling to distributors, they require an even greater discount off of MSRP, so that they can sell at rates comparable to your retailer rates, and still have a profit margin themselves. Distributors typically demand at least a 60% discount off MSRP, so you might want to plan your MSRP with that eventuality in mind.

That said, many small hobby retailers get discounts less than that from distributors (obviously, this is to increase the margin for the distributor) so they might get only a 40% discount off MSRP, or 45%, so you could ask the retailer to take a smaller markup.

You probably also want to look around at comparable games on the market: games of a similar box size, perceived quality, and complexity – the other games that are going to sit next to it on the shelf at your local hobby retailer (don’t try to compare with the big box stores, they’re selling things hella cheap – hobby stores can’t manage that, and you can’t either at this point).

Unfortunately, I’m willing to bet that for a first (probably small) print run, your costs were more than my example of $1 per unit. So, between your probably higher cost, and the likelihood that you’re going to have trouble adhering to these ratios while keeping the price in line with comparable games…

You might decide that you’re willing to accept a lower ratio, since you have lower overhead to run your company – but don’t discount the cost of your time and effort. Also, you might be able to get by with a lower ratio for now, and hope to get your cost down if the game is a success, and subsequent print runs are bigger.

Don’t forget to get out there and pimp your game to anyone who will play. Go to game/comic/sci-fi conventions, and if you get local stores to carry your game, ask if you can come in and offer free demos to customers.