How can mage guilds compete in an industry which allows others to resell their products?

Question

Mage-smithing is a process in which forged weapons are imbued with magical attributes in order to create enchanted weapons. This process is long and hard, requiring numerous items and various rituals to create the weapon, all of which can take months or years to complete. An entie industry has formed around the making and selling of enchanted weapons to mages for use. However, due to all the preparations that go into the making of the weapon, only large guilds usually have the capital and resources to develop them, creating a virtual monopoly of the industry. This has made these items very expensive, with only rich buyers able to afford them.

However, whippersnapper company has set out to change that by taking on the bigger guilds. This company, Enchanted-Stop, forms a business plan that focuses on making these rare items accessible to the average consumer mage. The business involves buying used items that are no longer wanted from mages at various store locations, and then reselling them to customers for less than what they cost to make. This has sharply driven down the cost of these items for mages, who can simply purchase them at these locations instead of going to the guilds. This completely cuts the guilds out of the profits, cutting into their market share.

The enchanted-Stop franchise has cost the guilds significant amounts of money by stealing away valuable customers, and have refused to cut them in on the take. Outraged, They have gone to the head wizard of the nation, Tronald Dump, to put a stop to it, arguing that these unregulated sales endangers public safety and puts lives at risk. However, Enchanted-Stop have successfully lobbied the magocracy to allow the practice to continue on the basis of human rights, popularizing the catchphrase " enchanted weapons don't kill mages, people kill mages". The public, happy that they now have access to these magical items at an affordable rate, cheer the decision. Dump, the crafty politician he is, uses this outcome to make himself out to be a man of the people in order to get reelected.

With the public on the side of this ruling, the guilds will continue to lose money and market share to the bastard upstarts. As they cannot count on a ban, they need to come up with a business strategy that returns profits to them and discourage the sale of their products. How can this be possible?

Answer 1

Frame challenge: Your mage guild has no problem, whatsoever.

Ok, creating an enchanted artifact is expensive. Buying it second hand is cheaper. However, with the possibility of reselling an item once it's not needed anymore, it's easier to justify buying it new. Just look at the car market: Cars are sold second hand all the time, but the ability to resell a car allows people who want to own the newest generation to recover a significant fraction of their expenses when they sell their old car three years later.

All such free reselling achieves is, that it sets up a food chain of sorts: The people with the least money buy the oldest, most heavily used, most outdated and most damaged artifacts. As they get richer, they can acquire less used, more modern, etc. artifacts. Once they get really rich, they can afford buying the newest, hottest stuff, reselling it only after a few years of moderate use at a stiff discount which is only justified by being a status symbol of their "achievements" (= wealth).

As long as the mage guild is the sole manufacturer of these artifacts, it has nothing to loose.

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That said, greed is a big driver of human actions, even if it goes against people's own best interest. In that vein, it is quite conceivable that the guild mages (who are no economists) will try to stop the reselling business. You can take inspiration from the computer industry for things they could do to make reselling harder:

• An artifact is bound to a single owner, and this bond cannot be changed. This is initially sold as a security feature ("It stops others from using your artifact against yourself!") It needs the intervention of courts to force the guild to allow changing the owner. Once they are forced to provide such a rebonding service, they charge an adequate fee (= ridiculously high) until another court action forces them to lower the price for rebonding to near the actual cost of doing so.

• An artifact comes with a service plan that allows it to get new features every now and then. Unfortunately, it requires an account with the mage guild to get these new hot features, and an artifact that has not been updated for a few years becomes totally outdated and unsexy to own.

• Some of the feature updates only work with the newest, most shiny hardware, forcing users to get new artifacts to stay up to date.

I'm sure you could come up with quite a few more interesting ways to put some sticks between the legs of the resellers...

Answer 2

Let's look at smart gun technology for inspiration

A smart gun is a gun and/or weapon that can detect it's authorized user. If said authorized user is not the one pulling the proverbial trigger, the weapon does not actuate.

What your guilds invented was Smart Magic Technology^TM, and all it requires is — a drop of blood!

The Mage Guilds are protecting their investments and intellectual property by binding all magical items to their owners through a newly discovered biological attribute: DNA (Denial of Natural Avarice). By affiliating a magical item with the new owner's DNA, it becomes impossible to sell the item as a magical item. At best, it's just a better-than-average art piece.

Answer 3

Customization.

Magic weapons can be purchased only by rich people. New weapons are now personalized. Such weapons can be used only by the prospective owner, designated by the person who commissioned it creation - for example a rich person might commission a magic sword for his bodyguard. If the owner of the weapon is not the one using it, at the very least the enchantment wont work. More likely the enchantment will work although not as intended, and will ultimately pose a danger to the usurper using the weapon. This fact may not be immediately apparent.

After a few disastrous "events" involving second hand enchanted weapons, all second hand enchanted weapons become suspect and the market for them crashes.

Answer 4

Lease Agreements:

No complicated arrangements. The mage that makes an item is considered to "own" his own enchantments. From here on out, all magical items are retained as the property of the mage that enchanted them. But hey, what do we need with these things? So We'll happily lease the items out for as long as you live at a (not really) reasonable price.

So if only the guilds can afford the expensive process of enchanting, they control the supply of items going forward. Higher up-front costs of making the items without an immediate buyer will actually drive UP the price of enchanting, so the big guilds have an even more iron-clad lock on the market. The whippersnappers might get into the enchantment business eventually, so make it hard. On a mage's death, his magical estate passes to the guild in compensation for all their investments (and keeps making sustained profits).

Now that doesn't change the fact there are currently items out there. Eventually, they'll wear out or the enchantments will degrade. So some day, the mage's guild will once again hold the exclusive control of the entire market. Commoners have money too, and it spends as easily, so you can have short-term rentals to them (at high cost per unit of time-after all they are weapons). The whippersnappers have pointed out a new business opportunity in item reuse, and is the mage's guild going to stand in the way of profit? Progress. I said progress.

And if the mage's guild happens to influence the occasional revolutionary to start a war, or usurp a throne with offers of discounts, how is it their fault? After all, the commoners wanted weapons too. Maybe the head wizard will reconsider his support for commoners when the stability of the kingdom is threatened by constant warfare breaking out.

It's good to be a merchant of death!

Answer 5

Wear and tear

Another aspect that nobody has mentioned yet - perhaps the enchantments wear off with time, getting less powerful and then eventually fading away entirely? This way there is always a need for new weapons, similar to how there is always a need for new cars. And if you have enough money, you'll always opt to get a fresh item because it will last longer and be more reliable.

Economic takedown

The guilds band together and raise enough money to just outright buy Enchanted-Stop from its owner. Then they shut it down.

Planned obsolescence

If the original items are too durable, these strategies can be combined. Take out Enchanted-Stop, quietly eliminate their stock, and then start making items that purposefully wear out in a few years. Another Enchanted-Stop might arise, but the demand for your products won't suffer much for it.

Answer 6

The weapons use has a signature that identifies the owner.

When an weapon that's enchanted meets its owner, it links to its new owner in some magical form. This could give high level weapons cool powers (a sword that jumps to the owners hand when the owner is threatened?), but for the purposes of your question, this allows the town guard to call a mage to murder scene, cast a low level "reveal what happened" spell, and the weapon, and thus the owner, are identified with a certainty strong enough to secure a conviction.

The only way to sever the link is with death or the destruction of the weapon. If a hero offloads an enchanted weapon they have held at the market, someone evil could buy it and then commit crimes the hero would be blamed for.

Answer 7

Without government protections it isn't much of a guild, but here are some (not exhaustive) options:

• Illegal and underhanded measures -- It would be a shame if your startup... stopped starting up.

• Leasing -- lease your products to mages so that your guild retains ownership.

• Start selling cheaper items with no durability (if possible), making second-hand items next to worthless.

• Set up one's own second-hand stores to compete with Enchanted-Stop in the 'poor mage' market.

• Try to lobby for more regulation of all mage products - if successful it will hurt the guild to a limited extent, but hurt startups more - hopefully making entry into the market impossible. In particular, safety regulations might harm second-hand suppliers disproportionately.

• Deal with the fact that Enchanted-stop is supplying second-hand goods to the 'poor mage' market. Focus on producing high quality products and brand equity for the 'rich mage' market.

• Encourage or coerce Enchanted-stop to join the guild.

Answer 8

This may be approached with a marketing eyes.

1. Planned obsolescence. Your produce start to function less effectively or break after a defined period of time.
2. Aggressive advertisement for the new fire sword X, which is way better than the fire sword 7. Because it is new! Like some tech companies does.
3. Your product can only be repair by the mage guild at expensive cost.

IMO if it works on our worlds it may on your worlds.

Answer 9

Mage Guild Profits come Primarily from Upkeep Costs.

Magical weapons are expensive to buy but also expensive to produce. So the profit margin is low. In fact the mage guild makes most of their money on upkeep costs.

Every year you must bring your weapon back for re-infusion.* This requires a skilled mage but is cheap in terms of time and components, so the profit margin is high.

It's similar to buying a cheap printer. The company might charge €20 for a printer and make zero profit. But they charge another €20 for each ink cartridge and make €19 profit.

You are free to buy your weapon second hand from Enchanted-Stop. However you still need to visit the mages guild for upkeep. Since the mage's guild has a monopoly on skilled mages they can charge high prices for re-infusion.

In fact the Mages guild has profited since Enchanted-Stop was created. Now there are more weapons in circulation, instead of sitting in dusty old cellars. That means more people need their weapons serviced which means more profit.

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$^*$ Bonus points if the need for re-infusion is there on purpose. The mages guild knows full well how to produce magic weapons that don't need upkeep. But that would be bad for the bottom line. It is a closely guarded secret. The only way to figure it out is to join the guild and study for ten years, at which point you are already in too deep so might as well remain in the guild and perpetrate the (highly lucrative) hoax.