This is an update on the effect of the UK’s referendum in which the majority of voters (52%) voted to advise parliament to leave the European Union.
The short version
Because of a steady new lower exchange rate between the UK pounds Sterling and the US dollar, we will be increasing our mail order prices to non-US customers in January by approximately 15-20%. Now is a very good time for customers in the UK, EU and the rest of the world outside the US and Canada to buy our products. This month’s new releases are at the correct price already.
Pelgrane Press Price Adjustments – the Full Version
Now the full version.
The markets appear to have factored in Brexit by devaluing the UK’s currency. Our costs of production and are in dollars, and our books are denominated with dollar retail prices. Pelgrane Press is an unusual position in that most of our sales and our costs are are in the States and are denominated in dollars, and were are in effect importing our own goods to sell in the UK. Our webstore still uses an exchange rate from happier, fluffier times, so our UK pound prices are very low. As well as this affecting our margins, these prices are also unfair on non-US retailers, who buy our books at the current exchange rate and mark the retail price accordingly.
For example, let’s say that Esdevium Games (the UK’s mains distributor) bought a copy of our epic Trail of Cthulhu campaign Eternal Lies in January 2016. The US retail price for that book is $50, which was £35.42 at the time. Esdevium Games get a 60% discount from retail, and so at that stage, it would have cost them $20 -£13.88. Then they sold the book to retailer Leisure Games at 40% off the retail price. Leisure Games then sold at the retail price to make their margin.
If Esdevium bought the same book today it would cost them £16, and the retail price to maintain margin is £40.42 – an increase of 14%. Currently the price on Leisure Games website is £38.99. The price on our website is £32.95 – based on the exchange rate at the time. So, as you can see we would need to increase our price by about 18% for parity.
Another way to look at it is this. We pay most of our writers and other freelancers in dollars. When we sell our books in pounds we have fewer dollars to pay our freelancers.
Our non-US sales have always made us lower margin, because of the price of shipping from the US to our UK warehouse, but as an outward-looking international company, we’ve always considered that a price to pay for a wider audience.
For these reasons, then from January our non-US prices will be adjust to match the new exchange rate – an increase of around 15% – 20%.
What this does mean is that until January, all our books will still be at the lower price.
We hope you understand why we have made this choice, and continue to support our lines – and if you want to get the books before the increase, visit the store!