Budget Stark - Why do Hot Toys figures cost more now, than 5 years ago.

[third3ye]

 

[Lejuan]

Just been out for a loaf of bread...

I'm pretty sure it was much cheaper five years ago

I won't believe it unless you write a thousand word post on it. Make sure it's snide and condescending for good measure.

 

[Boba Debt]

TRUNICATED TO SAVE SPACE

You state they just don't do it the way I stated in my example..end of: that would seem to imply you have some inside knowledge of how Hoy Toys does things at their factories, the life of the tooling, edition sizes etc.

He does have inside knowledge, he worked for them

How many figures can you get from the tooling/moulds before the quality becomes unacceptably and repairs are needed? Do you know? Is it 1000, 2000, 10,000?

The number or items per mold is irrelevant. In todays manufacturing, the R&D and engineering to create the molds is most of the cost. Once you have that done you can make injection molds as required.

What was the edition size of Red Snapper 2,3,4 000 you don't know, that is a closely guarded secret. What was the edition size of Peacemaker..you don't know, also a closely guarded secret.

The edition size is irrelevant. All pricing is based on formulas and they tweak those numbers to optimize profit.

Something as simple and making the size of the box smaller can add a fraction of a percent to their profit margin

So their planning ahead, they know their making a Red Snapper they know their going to make a Peace maker, they know they are the same. Your suggesting that they fire out Red Snappers until the moulds can't take it any more, how many figures is that? you don't know. Then they go of making other figures while spending a fortune repairing the Red Snapper moulds to make Peacemaker..Why?

Molds NEVER get to the point that they "go bad". Unusable parts hurt the profit margin more then under use of molds. They also dont "repair" them. They replace them. Some molds are cut from carbon with machine tooling, others are cast from
negatives, etc. Once the optimal number of parts are produced form a set of molds they just replace them.



Part of the licensing process is release schedules. Hot Toys has negotiated release dates for the figures they intend to produce and they can not change that schedule to make it more convenient. For all we know Marvel could have told Hot Toys the order in which they would produce the line up.

Also, you have to consider that the no factory has unlimited manufacturing capability. When they stopped making Snappers they made other figures from other lines until it was time to start making the Peacemakers. It is irrelevant to them because the figures they are making sell and produce profit.

This is giving me a headache but never mind.

Does it not make much more sense knowing your making 2 identical figures to make them at the same time from the same tooling? Both figures will have probably gone through all the approvals/licensing required, because that's what planning is all about. This is where edition size matters and tooling life, (guessing) you tooling lasts for 5000 figures before any deterioration occurs, so you make 4000 Red ones and 1000 orange ones.

This is surely the most cost effective and efficient way of doing things?

No, in some cases, producing 2 identical figures is not cost effective. For a variety of reasons such as:

Licensing payments. Hot Toys may not want to pay the licensing fee for Peacemaker and South Paw at the same time they are producing Red Snapper.

Storage. Storing any inventory until its release date can get very expensive. Plus storing them can lead to degradation of the product, especially the packaging.

Taxes. Unsold (or in this case stored) inventory is a tax liability in most cases.



I could go on but I don't think you have even a basic understanding of this market. Several people have tried to explain the complexities of manufacturing licensed collectables and you just discount their experience and knowledge.


I have a feeling that nothing will satisfy your thirst for answers so after this I will not bother to answer you pedestrian questions.

 

[Y4NK33 PL4N3T]

I won't believe it unless you write a thousand word post on it. Make sure it's snide and condescending for good measure.

 

[DiFabio]

So, wait, why do figures cost more than they did 5 years ago again? I can't seem to find anything in this thread.

 

[MyenShi]

Because everything costs more than it did 5 years ago.

/thread

 

[skizzoid]

I just read through what I wrote and some parts seems to be really incoherent, apologies to those who couldn't really understand whats going on. That's what fatigue does to you I guess. Will edit a better run tomorrow.

I'm glad at least someone read it though, just so I don't waste my time explaining things nobody wants to hear. =/

It was long, but I also enjoyed reading it. It was nice (and educational) to see a detailed explanation about some of the other aspects of this industry that people tend to ignore (or just don't think about).

 

[onethousandmasks]

People complain about Sideshow too

People complain about Sideshow's delusion that they are at the same level as HT and therefore can charge the same amount.

 

[kevb0977]

Because everything costs more than it did 5 years ago.

/thread

The End!!! lol

 

[K1NG J0RDAN]

Because everything costs more than it did 5 years ago.

/thread

Actually, gas is much cheaper right now than it was 5 years ago.

 

[Motuxmen]

This is giving me a headache but never mind.

Firstly as I stated at least twice in previous posts I do understand your example, I just disagree with the premise.

You state they just don't do it the way I stated in my example..end of: that would seem to imply you have some inside knowledge of how Hoy Toys does things at their factories, the life of the tooling, edition sizes etc.

How many figures can you get from the tooling/moulds before the quality becomes unacceptably and repairs are needed? Do you know? Is it 1000, 2000, 10,000?

What was the edition size of Red Snapper 2,3,4 000 you don't know, that is a closely guarded secret. What was the edition size of Peacemaker..you don't know, also a closely guarded secret.

You talk about each figure having a unique licence, a unique approval process, Hot Toys plans years in advance, all those thing will have been done and dusted long before the factory's actually start producing the final figures.

So their planning ahead, they know their making a Red Snapper they know their going to make a Peace maker, they know they are the same. Your suggesting that they fire out Red Snappers until the moulds can't take it any more, how many figures is that? you don't know. Then they go of making other figures while spending a fortune repairing the Red Snapper moulds to make Peacemaker..Why?

Does it not make much more sense knowing your making 2 identical figures to make them at the same time from the same tooling? Both figures will have probably gone through all the approvals/licensing required, because that's what planning is all about. This is where edition size matters and tooling life, (guessing) you tooling lasts for 5000 figures before any deterioration occurs, so you make 4000 Red ones and 1000 orange ones.

This is surely the most cost effective and efficient way of doing things?

Your Mustang example seems...well..strange two idetical Mustangs cost exactly the same to licence and I thought the point you were making with Ironman was that the licencing is different per figure? Also in a moderen factory if you decide you wanted red mustangs instead of black ones I belive it is almost as easy as the push of a a button to chance the color at the paint shop and guess what if you make less red ones than black ones you can probably charge more for the red one even though they are identical in every other way and cost the same to make. (which I think was the point I was trying to make in the first place.)

I am not saying I'm right and your wrong, I am quite willing to accept I could be taking rubbish, I know nothing about the inner workings of Hot Toys but it would appear niether do you , it would just seem like common sense and good practice to do things that way.

Like I have said I'm not in business and everything I've said is guess work but so to is everything you've said, may be you have knowledge of how some factories or companies do business but to use a resent quote I read.

“Not every company or network works the same. They may share some things, operate on the same basic principles of economics, but they are unique. “

The one big assumption your making is that we are both guessing based on the same info. Which, since you stated you have no industry knowledge and no business experience would be incorrect. I have worked at sideshow. Both internally (on payroll) and externally as both a partner on a few projects and hired to do a few projects. And specific to this conversation, with the hot toys distribution deal. I've spent (outside of around ten years in the military) my whole life in either studio work (wardrobe, prop master, sets, visuals, cinematography, talent management, and effects) or toy/statue work. And not just adult life, as my family works in the same fields. So I do have a better inside look then your average person. This is where my info comes from, and what I base my opinions on. I'm not saying I'm always right. But I am saying that I do have a unique insight into how this works.

The way your ideas are laid out and make perfect sense. It's more or less how it should be done in a perfect world. But unfortunately it's not exactly how it is done.

If you have two figures that the only difference are paint apps then you would think it would be smart to run them all at the same time. And some places can and do do that. But because of a laundry list of things it's not exactly how hot toys can do it. And even if they did, it really would make little difference to the cost to manufacture each. Because of the way the figure needs to be billed and other crap.

And there's a ton of reasons they wouldn't produced the figures at the same time. Schedule for manufacturing on these is something Hot Toys has very little control over. Every single aspect of the figure, from prototype, to box and packaging has to get individual approval from the licensing company. In this case marvel. So they make a prototype. It gets sent to marvel(or marvel rep comes and checks it out, or they Skype or do photos but generally it's an in hand deal). They have to wait for marvel to give them a yes or no. They get an approval and then the engineering and tooling gets laid out. They make a small test run. They assemble it and then the production figure goes thru that whole approval process again to make sure it still meets marvel standards (and sometimes the actor and sometimes the producer also and sometimes a whole separate studio is also involved). After that gets back they can then get a full production run done. Now while this is going on the factory does not sit idol. They are always producing something. So the tooling for the figures out for approval are pulled and the ones already passed that step are being run. (Or stuff from other lines and companies). And because this is something that takes a random amount of time they can't schedule the run until they have approval already. This happens for the box stuff too. And this is just the logistic side.

For sales reasons they would not want to have to nearly identical figures out at the exact same time, as most people would pick one and pass on the other. But if they are spread apart the chances of that go down. But because they are so close they know one will have lower sales no matter what, so that's why one is produced in lower numbers.

Now for billing reasons and tax reasons and a couple other boring reasons that most people don't care or know about...each figure will have unique tooling costs. Even if they spread it out even between the two figures. So half the cost goes to red snapper and half the cost goes to peacemaker. It doesn't matter what the total cost is, but it's split evenly. Make sense? Which would mean they both have the exact same tooling costs. They both have the exact same licensing costs. Those are the two largest costs in manufacturing a figure. A general rule of thumb would be 75-95% of the total cost to produce. Sometimes more sometimes less.

So if almost all of your costs are exactly the same but one figure is produced in larger numbers then the other that means to make the same amount of money the figure produced in lower numbers would require a higher retail cost.

I believe the biggest issue here is you are thinking they take the tooling costs (if they run them at the same time or not) and spread them evenly over the total number of figures produced. Which is not how it's done. At best if the tooling is completly the same between two unique figures, and they are run at the same time and sold at the same time (with peacemaker and red snapper everyone knows they where not sold at the same time, so if they where run at the same time you would still have added cost of warehousing and a few other things all depending on how long they are held back) the costs are split between sku or unique license or name or design. Whatever you want to call it. Peacemaker gets half. Red snapper gets half. At the very best.

Each figure is a unique product. The TV/movie merchandise business is insanely complex.

If a toy company owned the figure rights and owned it's own manufacture and shipping and packaging and had its own in house sculpting department and painters and there was no government regulations and they could sell direct, it would work exactly like you thought it should. Well it should anyway. Sadly it's just not the way it does work.

Even a company like Mattel with a line like Masters of the universe, which it owns and is not licensed from another entity, does not run that simply. They hire outside sculptors, and distribution and manufacturing. All of which complicates things.

 

[Y4NK33 PL4N3T]

Actually, gas is much cheaper right now than it was 5 years ago.

Gas is free, and very abundant after a helping of beans.

 

[nexus]

What happened to good old supply and demand? Does anyone really think that's not the primary driver. Sure licenses are more expensive, materials might be up slightly, and workforce might be a little more expensive, but a 50%-100% increase. That's not happening in any other segment of the toys and collectibles market. The bottom line is there's enough global demand to justify the pricing model. 1:6 is a hot market right now, and Hot Toys is at the top of the heap. They also have three of the most powerful brands in the world, fueled by blockbuster films and merchandising. So that's just the way it goes. Keep in mind these are luxuries, not necessities. There is no cartel in a smoke-filled room fixing prices and shaking down the hapless customer who has no choice but to buy. It's a company doing market research, factoring in various cost, figuring out where the pricing sweet spot is per item, and selling through to make a solid profit. This is what every company does. If they start hitting barriers that adversely impact sales they'll need to adjust accordingly. But regardless of price HT is a company that delivers high quality product with excellent artistic representation. I'd prefer that to a company that is constantly cutting corners to up its margins.

 

[holtrax]

Hi Guys

I see this topic coming up all the time in forums and facebook, so I thought I would do a short video from a business aspect on this topic.

Thanks for watching.

Yes you could sum it up in that way or another term you could describe it as is 'greed'

 

[Boba Debt]

Yes you could sum it up in that way or another term you could describe it as is 'greed'

That is a stupid comment

 

[Invictus Sol]

I don't think "greed" really applies to something as frivolous and unneccessary to one's life as these toys. If I couldn't afford to own them at all, I'd still enjoy seeing the pics. I've had a couple cases of sticker shock since getting into the hobby, but HT's prices are pretty reasonable, all things considered (especially if one compares to customs).

PS - Great thread, Budget. Have really enjoyed reading it.

 

[Devil_666]

Hookers and cocaine are expensive as hell compared to 5 years ago too. I'm pissed.

 

[Y4NK33 PL4N3T]

I just read that sig.

 

[justme]

Just ran across this video, I wonder what others think about the points brought up? Not my video so if its a member's and you don't want it posted here then lemme know and i'll take it down.

 

[Invictus Sol]

Lol, reminded me of what a teenage Woody Allen might sound like complaining about the price. He doesn't really have a point, beyond saying he expected it to be cheaper and that, in his opinion, Igor is less complex than Monger and so should be less expensive. He's not factoring in anything else, so it's rather ill considered.