Best Chip Manufacturer (3 Viewers)

[mummel]

Hey, I'm no Ritchie Rich. I bought Paulsons after a lot of reading and a bunch of samples and a bunch of incremental budget increases.
I was gonna go with China clays because that's all I could reasonably afford. I couldn't decide between majestics and milanos. Then I decided that for the extra money, ceramics were worth it. But I couldn't decide between Nile clubs or Veneratis. And when I decided that spending the extra on Veneratis was worth it, I figured it might be worth spending a bit more on Scrolls.
While I was debating exactly how much to spend on ceramics, I ordered some Paulson samples. When I got my hands on those, I figured if I was gonna spend 75 or 80 cents apiece on good ceramics, it was definitely worth upping that to a buck apiece on Paulsons.
Then about a month later, I came into an extra grand, and over a period of a few weeks, I spent it on about 450 paulsons, building a small mixed casino cash set. Because I figured if I was gonna spend a buck apiece on Paulsons, I might as well spend $1.50-$2.50 apiece on good paulsons that I really liked.
I didn't spend big money on Paulsons because I have money to waste. I chose to splurge on them after a lot of careful consideration and plenty of silly rationalizations.
Since then, I've probably dropped another grand on a good sized set of Cleveland Horseshoes that includes higher denoms I can use for tournaments. I bought those because Poker chips in general and Paulsons in particular are addicting. But it's not because I have money to burn. I don't. I haven't bought any new clothes in a while, and I haven't gone to any shows or concerts or ball games in a long time either.

This is epic. Loved your post. Brutally honest. It's the sickness!!!!

 

[pltrgyst]

..."Why not just use the $2 chips for $8/$16?" To help manage table/rack space better.

And then some imbeciles come along and want to use mountains of pink snappers for a $7.50/$15 game...

 

[Vinyard]

Our home game is a $5/$10 cash game, so I will be looking for 5/25/100/1000 denominations.

I am a little perplex...$5/$10 cash game and $2500 chips set is expensive? in time it will be a bargain.

 

[SteveHNo96]

$5/$10 game? Feck.... too much. No wonder you want the chips that will run you a King's Ransom. let's put it this way. I was debating a $.25/$.25 or $.25/$.50 game. I would honestly feel like I had too much at stake if I went with more than a $1/$2 game.

Oh and with stuff like the custom ceramics, I simply feel I will own them forever. The rest of them I may exchange later.

By the way, I voted for you last November.

 

[justsomedude]

Somewhere at GPI, a multi billion dollar corporation, someone is crunching the numbers and screaming: "There are thousands to be made in the home market, THOUSANDS!!"

Sorry to go back to November on this reply, but GPI's market cap is only $95 million. Not really in the realm of "multi billion."

 

[Tommy]

There is so many...

Spoiler

 

[dew4au]

Sorry to go back to November on this reply, but GPI's market cap is only $95 million. Not really in the realm of "multi billion."

View attachment 76891

Well, then,... Multi-million dollar company! My point still stands.

 

[justsomedude]

Well, then,... Multi-million dollar company! My point still stands.

I understand your point, and I think there is some room for debate.

From their most recent quarterly report, ending September 30, 2016:

Historically, we have experienced significant fluctuations in quarterly results primarily due to large, discrete currency orders as a result of casino openings, casino expansions, or large replacement orders. However, we continue to experience steady growth in our consumable products which now represent a significant percentage of our overall revenues.

...

In the Americas, we have continued to experience steady growth in our playing cards product line. This has the promise of continuing to provide the Company with a more consistent and predictable revenue stream. To support this growth and to allow for additional growth in the future, we anticipate finalizing the expansion of our Blue Springs manufacturing facility in the fourth quarter of 2016.

Some GPI internal definitions, from the InvestorRoom.com:

• Non-consumable products consist of gaming chips, gaming furniture, and table accessories.
• Consumable products consist of table layouts, cards, and dice and due to their use represent recurring revenue for the Company. These products have a useful life that ranges from several hours for playing cards and dice to several months for layouts.

For reference, here is a breakdown of their net sales for the quarter ending 9/30/16...

The report also states that, "no customer accounted for more than 10% of the Company’s revenues," which I find interesting.

Looking at their historical data (which I won't present here, but is available in the report), it's clear that more than 50% of their revenue comes from consumable products and gaming furniture. Only $3M in net sales came by way of non-RFID chips.

Call me crazy, but I think it could be debated that a $90,000 non-RFID order from some chip nerds, which would represent approximately 3.0% of net sales (for that segment) for the quarter, would be nothing to sneeze at.

 

[Mental Nomad]

Call me crazy, but I think it could be debated that a $90,000 non-RFID order from some chip nerds, which would represent approximately 3.0% of net sales (for that segment) for the quarter, would be nothing to sneeze at.

$90k would be 3% of 3rd Q '16, but it's only 1.3% of 3rd Q '15. (And it's a tinier fraction of annual sales.)

What's the value of that, versus being able to tell the casinos, "for your security, we only manufacture for the professional casino market?"

 

[dew4au]

Call me crazy, but I think it could be debated that a $90,000 non-RFID order from some chip nerds, which would represent approximately 3.0% of net sales (for that segment) for the quarter, would be nothing to sneeze at.

All good points.

I know they've done the numbers. Three percent net on the quarter would be nice, and the market is laser focused on the short term, so why aren't they pumping out orders to Trademark / Apache customers? It must mean they value the threat to game security, real or perceived, high enough that it wouldn't be worth it.

Using old school numbers:
Minimum Order 100,000
MSRP of Chips offered from Trademark: $1.25 / chip
Guesstimate of what Trademark paid: $1.06 (MSPR - 15%)
Total Payment to GPI for the Chips: $106,000
To clear a $90k net, that would be a 85% margin, which I don't think is realistic.

The minimums were bumped to 250k after that.
Minimum Order 250,000
MSRP of Chips offered from Trademark: $1.25 / chip
Guesstimate of what Trademark paid: $1.06 (MSPR - 15%)
Total Payment to GPI for the Chips: $265,000
To clear $90k net that would be a 34% margin, which is doable, but holy crap is that a butt-ton of chipes!

How many quarters are they going to be posting a 250k non-gaming license order? Not too often, I suspect. Again, we're still talking about thousands and they've likely valued the threat to game security more than an extra 3% for one quarter a year.

 

[justsomedude]

$90k would be 3% of 3rd Q '16, but it's only 1.3% of 3rd Q '15. (And it's a tinier fraction of annual sales.)

What's the value of that, versus being able to tell the casinos, "for your security, we only manufacture for the professional casino market?"

I think the value is maintaining/solidifying that market segment. I'm sure we wouldn't be the only buyers... other particular home game hosts, charity groups, social clubs (Elks, Shriners, Masons, etc.). That 3% could easily become 15% if they wanted it.

And while I agree with the stats that it's a small percentage of overall revenue, it's also their most volatile market segment that fluctuates wildly from one quarter to the next. Yet it doesn't need to be.

Maybe they are confident in their consumables holding down the fort for years to come... but from a business standpoint, I don't see why they continue to let non-RFID languish, when it could easily be expanded. Why leave money on the table? I have a hard time believing it's simply for being able to promote the "exclusivity" of serving the "pro casino market."

 

[justsomedude]

Again, we're still talking about thousands and they've likely valued the threat to game security more than an extra 3% for one quarter a year.

Are we? See my response above. I think there is a huge potential audience, given the custom chips seen in TCG from the various clubs and organizations out there. I doubt one PCF group buy would be the only outcome of reopening to the home market.

But I like the healthy debate. Let's keep the convo going! (and maybe GPI will sneak on in here and hear of our woes!)

 

[Mental Nomad]

charity groups, social clubs (Elks, Shriners, Masons, etc.

That's the market for Dice Chips, my friend.

 

[BGinGA]

I suspect that if our 'home market' order consisted of 250,000 RFID chips (plus an RFID solutions purchase), they might reconsider their position.

And since when do you consider shipping as part of net sales? Those are some big frickin' numbers.....

 

[justsomedude]

That's the market for Dice Chips, my friend.

Today, yes. But there's plenty of examples of fraternal and private card room chips on the THC mold.

 

[justsomedude]

Those are some big frickin' numbers.....

You wanna see big numbers? Check out the 9 month summary!

Of $59 Million in net sales, I'm amazed that only $11.5M of it was in "standard" chips. Talk about an operation...

I still can't believe they sell $7,000,000 worth of playing cards... each quarter. WTF?

I'm in the wrong business.

 

[Cdsmitck]

Hey, I don't mean to drag up a two year old thread.. but in this day and age of kickstarter, go fund me etc.. has a new manufacturer appeared on the market? Or is piecing together a set of Paulsons still the way to go for a top quality cash game set?

 

[allforcharity]

Hey, I don't mean to drag up a two year old thread.. but in this day and age of kickstarter, go fund me etc.. has a new manufacturer appeared on the market? Or is piecing together a set of Paulsons still the way to go for a top quality cash game set?

No brand new manufacturers that I've heard of. Some consolidation within the industry, though. CPC is still your best bet for custom clays, although we're waiting for @ABC Gifts and Awards to make some sort of announcement eventually. Still a brisk trade in Paulsons in the Classfieds!