Economics Question

[Sonneilon]

I was thinking, based on the past retail experiences that I've been in, the more a company produces, the cheaper the product should retail, right? That's why places like Walmart, Trader Joes and Daiso can sell things for 'cheap'. They buy in huge numbers (don't mind the business practices of trying to keep regular costs down).

Remember those GI Joe 2-packs we were getting from 2002? They ran between $7-$8 per 2-pack. Not a bad deal, really. It was also stated several times that the Hasbro production #s were between 100-150k units. Based on said above economic theory, that is why we were able to get single figures for about $4 a pop.

Come to the 25thA, we KNOW that the original production #s must've been pretty low. The fans are paying between $5-$7 for a single figure now.

Now here's the question. IF Hasbro was producing the 25A figures in the 150k range, would we still be paying $7/figure? Or is Walmart showing the fans what we should REALLY be paying? On top of that, is it REALLY that expensive to produce single packs? And the new articulation, is that what's also driving the prices up?

It's in my opinion if Hasbro produced more in the initial runs and FLOODED the stores, then we'd be paying prices comparable to Walmart's. You gotta figure that if Hasbro wants to make money back, they need to produce more. *shrug* Sure, the reuse of body parts can work wonders and smart 5-packs will be bought up faster than fresh donuts in an office. I've stated on the JBL that the B&M stores were utterly dumb in how they ordered the stuff. You gotta figure there's about 1 of each figure of a wave in a case. A store gets 1 case, it only takes 1 person to buy the whole wave and BAM, the peg is empty for a week.

It's more than distribution. Hasbro simply didn't make the numbers (they should've leaned on the Big3) and the stores didn't forcast well enough. Maybe 5 cases a shipment would've worked but man... Both sides really goofed, eh?

[lehsreh]

[COLOR=Red]the 25th at my wal-mart sold for 4.88$ really good i would think. bad thing now is they took the pegs down where the joes should be and im wondering if my wal-mart will be getting anything back in. by the way, what is Trader Joes?[/COLOR]

[vader9900]

I have been a toy dealer since 2001. If I want to sell new items I have to go through a 3rd party to do it. To be a direct Hasbro dealer, you need a initial purchase of $10,000 or more & every other purchase is a minimum of $5,000. My wholesale price is MORE than what I could buy them at WalMart for. Even with a Credit approval, you first purchase must be paid for in advance. I quit selling new items completely, there is no way to compete with WalMart. No one can complete, not even Target or TRU, they buy less items & are charged more, so they have to charge more. If Hasbro flooded the market with a wave of toys, they are afraid they will sit & not sell through. This has happened with alot of Star Wars figures, who would have thought that Clone Troopers would be peg warmers. Hasbro never releases run counts, I think 150,000 is high. The 25th Joes sold way better than was expected, that is why they are continuing past the original 25 figures that was promised. If figures are "hard to get" then that creates urgency, and people buy then when they see them. If there are 5 of each figure on the pegs, some will wait until next time. Hasbro has a projected profit on a sculpt & releases the number of figures to meet that profit. Remember Hasbro is not in business to make toys, they are in business to make money.

[sithviper]

[QUOTE=lehsreh][COLOR=Red]by the way, what is Trader Joes?[/COLOR][/QUOTE]


Hope this helps to answer your question

http://www.traderjoes.com/

[Sonneilon]

I was getting the numbers from both EEJ and General Hawk over on the JBL, but that was years ago. We also knew that when the DTC came out, the numbers were cut significantly and iirc, Hasbro gave some rough numbers at the convention before DTC Wave1 came out.

Ok, so Hasbro makes enough to break even or whatever. Why not produce more to bring costs down even further? That would end up creating a situation where the Other 2 could buy 'em for less, right? Or is Hasbro's bottom line so heavily involved in making money that there is no 'right' in what they can do?

[Lava Boss]

Hasbro is charging what it does, because it can get it.

They are mining nostalgia and the collector's market and their recognizable brand name.

If they wanted to corner the market on 3 3/4" military, they'd produce things like the VvsV single packs, go after the CORPS crowd. I mean, if Lanard can make articulated figures that retail for a buck or less, Hasbro could, too. It's not like Hasbro couldn't use old tools. I doubt the TRU RAH 6-packs really costed that much to produce.

[ToneGunsRevisited]

I think vader9000 made the point here.

[Mobius_1]

This same problem is happening with th US military(sort of). we were originally gonna buy 750 F-22 raptors, but as we ordered less and less, the price for each plane was bigger and bigger.

[Mike T]

It was also stated several times that the Hasbro production #s were between 100-150k units.
I don't know where that info came from but it is likely way too high. The TRU exclusives were produced in numbers between 16K-20K from 2004 on. The regular figures were largely believed to have production runs well under 100K...more likely in the 40K-60K range with some waves being higher and others being lower. The comic packs likely saw production runs in line with the TRU exclusives - maybe a bit higher for some waves that were eventually clearanced.

DTC was dramatically scaled back to around 10K cases of Wave 1. That was a HUGE overproduction and Hasbro scaled back production on subsequent waves. Truth be told, it's likely that the Vietnam and DD comic pack wave was produced in numbers similar to Wave V from 2002, and that only had a maximum of 5,000 of each figure produced.

Hasbro was making lots of money off each figure back in the modern era. But, they sold so few that it still wasn't enough to keep the line going. Despite what a lot of places want to tell you, Joes are pretty cheap to make...even with the packaging. Even at low production runs, you could afford to sell Joes for reasonable prices and make a hefty profit. But, Hasbro it too big to really care about that in most cases since a 5K production run isn't going to affect the bottom line at all. I have a suspicion that the 25th stuff will end up just as common as the JvC stuff is these days. Right now, they are taking their time. But, I think we'll eventually see most of the figures become fairly easy to find and very cheap on the second hand market.