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Disney D23 Expo: WrapUp and the Business of Exclusives

LaneChange sends us his wrap-up from D23 Expo …

I can tell you that I was literally the 4th person in line at the Mattel booth to purchase the Convoy Brothers.

I arranged to meet TopherDawg from Take 5, we met at 5am greeted by about 500 people already ready to line up.  We were moved a few times prior to the doors opening for us at 8am.

Once in the building we were ushered to the Disney Dream store, I ducked out of line prior to the 9am opening and made my way to the Mattel booth, a few other people decided to make the same move.

At the booth I asked what the limit was and was told there was no limit, I had only planned on purchasing 6 so I asked for 6, the 3 people in from of me purchased a few each.  They rang mine up, I handed my Discover card and was told they didn’t accept Discover… DOH!!  I then switched to my bank debit, which was declined because I was in California and not Texas, after a call to the bank everything was set and ready still no line forming and it was about 9:30am, however as I was on the phone 3 people came through purchasing 6 cases, 4 cases and 4 more cases, with 6 per case over a 100 were sold in the first 30 minutes, I got back in line ready to purchase and I changed my mind and bought just 2… ugh I just didn’t have room to bring them back to Texas and couldn’t go to UPS to ship them home.  While I was making this decision my phone died all the while my 6 were still bagged up waiting.  I walked out with 2 feeling good, then read that they began to limit the purchases and felt stupid as I could have helped others out.

Thanks for the nice photos, “LaneChange,” – the rest of the captions are made up by me. 🙂

View of Entrance

 

Nope, not early evening, EARLY MORNING. If you had a mule-carrying Starbucks, you’d be rich!

5am line

Sun comes up – we’re almost in!

8am about to head in

I feel the need – for some motor oil … and the free CARS that comes with it.
Convoy Kept Coming (5)

Yes, you best bring out some more.

convoy more

I want the master carton! Bring them to me! The empty master carton boxes will fetch me big dollars on eBay!

convoy master

And now a moral, philosophical and business acumen wrapup of D23 Expo.

First, let’s start from the start. Exclusives were meant as a marketing tool to get you to come to the booth back in the day when it was a more casual/county fair type of atmosphere (8 years ago at comic con, most of the show was folding tables and vinyl banners) so what better way to generate buzz and foot traffic to your booth with an exclusive. It didn’t have to be fancy, a repaint or maybe just a hologram sticker on the package. But of course, the stakes were upped. If you’re a small time toy/figure/plush shop, this is still a fine way to go to get a boost in action and of course, give people a reason to visit your booth.

But for the large to monolith toy companies (Mattel/Hasbro), they are trading off SALES for pointless marketing that actually serves to annoy more customers than it serves.

They lose money not just once but FOUR TIMES in one fell swoop.

They spend extra money on packaging, sculpting and creating a purposely limited low run production.

They spend money staffing up a booth and process to handle a number lottery process and overflow lines.

They sell a limited number – limiting their profit ON PURPOSE.

They end up annoying MORE people than they sell to – thus DEFEATING the purpose of marketing. Instead of adding MORE PEOPLE to your line as customers, you are telling in effect – no thanks, we’re mass merchandisers but we don’t really want your business – we’ll sell to the first 1,000 “fans” who line up “early.” Of course, this also presumes these are really your best fans … if they truly are, then they would buy only one and love to have you personally stamp the back of the box with their name and hometown, right? Or at the show, after purchase, John Lasseter will personally rip the box open and throw it to you. What TRUE FAN wouldn’t want that, right?

So, exclusives at the big shows by large toy companies have lost ALL meaning because they NO LONGER serve the purpose they once did. They are NOT coming by your booth to look at what you have and perhaps buying a cool thing stamped with the show as a keepsake … instead, the process involves looking up your booth, racing there pell-mell and jostling in line for hours to get to the front of the credit card machine AND is there marketing going on while the line is queued?

line

Nope. Unless it’s the guy in front of you wearing the shirt that says “Who Farted?,” and you’re just dying to get in THAT line to buy that shirt.

Or are most of the people in line really just calculating what their take is after eBay/Paypal fee? NOT THAT THERE’S ANYTHING WRONG with that but again, does the line and process REALLY serve Mattel (or Hasbro) and their fanbois and fangrls?

No, because if you really wanted to sell to resellers (AGAIN, NOTHING WRONG WITH THAT), this is a stupid process.

Toy makers have to decide what audience they want to serve or all of them but this is a stupid process as it stands now because it serves NONE of your audiences.

Why limit your profits?

There are three audiences.

A) Retailers/resellers.

B) Current fans.

C0 New/potential buyers/fans.

When you artificially limit sales, all you mostly do is reward the A group at the expense of B or C.

Again, I am not against capitalism or eBay or anyone selling ANYTHING (non-illegal) for what someone is willing to pay. In fact, I totally encourage it. It is your money. You decide what you like or want to purchase. What I am against is idiotic manufacturer who refuse to sell me something I want to buy. It’s not a perishable good. Make more. You !@#@$*&%¢∞¢

Sure, there are some collectors who like having purchased an item on Thursday and the warehouses catches on fire on Friday – but that’s a separate issue.

Basically, the large toy companies are working on the premise that artificial scarcity will excite the fans. Sure – but at what expense?

Why not round up 30 kids, wave a bucket of ice cream around and dole it out to 5 kids – those 5 are sure excited. Super excited! WooHOO!

Er, about those other 25 kids? That’s the REST of your audience. Hello. Hello?

You’re not even greeting or making any impression of your “fans,” other than having them jostle in line and you take their credit card. If you’re gonna do that, why not avoid the line and just take their credit card info?

To maximize profits, it’s simple. Resellers can order as many as they want. You still have to come to the show to pick them up. But offsite so you don’t clot our booth. AND there’s no restriction. Why? If you can sell 1,000 of these? It’s YOUR MONEY. Buy as many as you want – who are WE TO ARGUE WITH YOUR BUSINESS DECISION? We get paid upfront. we don’t ship anything – just come by and pick them up. This also helps the manufacturer as they know exactly how many to make as these are pre-paid orders.

Note, in this scenario, I’m not saying someone should just be able to buy up the entire production run, instead, Mattel simple uses pre-orders as a gauge to decide how many to make. Look at the Convoy Brothers scenario – without consulting anyone or asking anyone, they presumed all they could sell were about 1,000 sets. So, if your pre-orders are 2,500 – maybe you add the 1,000 on top of that, right? And what do you care what the secondary pricing is AFTER THE SHOW, right? Mattel has in effect sold 3,500 sets at $100 – if there is very little secondary market after the show, why should Mattel care? (Clearly they did not care when they made 110 million Finn McMissiles 🙂  so, what’s another 3,000 Convoy Brothers?). They got paid. AND if you as a business decided to buy 500 of them, that is THEIR business decision, right? That is a wholly separate issue. Sure, you might only buy toys to resell but that’s your business – that is why you are in business, you make your OWN purchasing decisions – some are good choices, some not so good but that’s NOT our business. For most of us, we’re just here to collect, right? And remember, we live in worldwide access economy, you don’t have to speak much English to use paypal to transfer money and you are protected for your purchase – capitalism is great! Pre-internet, your audience was pretty much limited by US retail distribution and that was a costly endeavor – now, you can sell nearly anything from at home and if you can leverage eBay, YouTube, Twitter and Facebook, you can practically spend zero money marketing but sell a lot of stuff … now, manufacturers are restricted because sometimes their contract states only a certain territory or country but resellers have no such restrictions, that guy/girl who bought 500 Convoy Brothers might only make $130 reselling the Convoy Brothers (presuming there were no pre-order restrictions) in the US but maybe it’s still worth $200 in Japan, or $195 in Italy? Why not let resellers not only pay you full retail but carry all the hard work of selling overseas or where-ever? Again, Mattel shouldn’t care – they sold the maximum amount for their maximum profit and was paid upfront essentially.

Or if you ONLY want to sell to the fans as some reward? Do as Disneyland does, design a real line queue that is entertaining and informative. You have to pass a quiz (that changes so no passing answers along. 🙂 ) … get an A, get 10% off one, etc, etc … resellers might do this once but they’re not going to spend 20-minutes to maybe get 10% on ONE when they can just go to the offsite place, pick up their 50 and be on their way … I’m only saying this is if your exclusives are really only for fans just like some musicians have ticket sales to fan club members first.

Or if you have a kids line, watching a short nets you a 10% off coupon – for the last audience if you want to expand your line.

These are just ideas off the of my head but I think you understand what I’m saying – the current system serves NO ONE. It forces resellers to hire buying groups. It rewards very few actual fans and actually annoys the vast majority of them. AND how many new Monster High fans were able to buy a doll at SDCC or newbie CARS and PLANES fans so they become NEW fans at D23 Expo? Very few.

That’s the other thing – at D23 Expo – you couldn’t find any other CARS or PLANES item to sell? Hello? Hello? Not even – reach into this drum and get a free Super Chase! (Odds of Super Chase .01% – Odds of LM with Racing Wheel or Finn McMissile, 99.09%).

So, the problems at D23 Expo and at SDCC & pretty much with the rest with the toy manufacturers is not realizing it’s not 1979 anymore. Either sell the proper amount or really, really reward just the fans OR both. Clearly, there is a limit to how many you can sell in a few days and of course, you don’t want to lose the excitement by having too many left over but with pre-sales, you can figure out how much interest there is. AND by delivering at the show, you are still making people show up at the show. For the fans or the casual fans, there is still the booth – but if the resellers can buy enough, then the people in line buying in 1’s or 2’s are the true fans who want to stop by and say hi. You serve ALL your audiences and of course, make MORE MONEY by selling more product.

As it is right now, the groups that run each toy line have to try and guess what they can sell and usually lower it by 50% to insure they can tell their bosses, “people fought like crazed fire ants for these.” AS IF THAT’S A GOOD THING?! The truth just makes them look stupid, “Man, we way under-estimated how much we could’ve made – just on the Convoy Brothers, $200k! my boss man, you are a fool for trusting ME to guess maximum revenue!”

🙂

Instead of 1,000 Convoy Brothers, they probably could’ve sold 3,000 with the proper pre-sell and pickup and maybe some actual marketing at the show instead of placing them in a glass cabinet and the entire marketing of CARS consisted of “how many do you want?” which was later replaced with a SOLD OUT sign in 90-minutes. Guess it was nice for the booth employees to relax after 90-minutes each day to start texting each other about which Disney Channel star they just saw. (Or for the @36-hours the show was open, they sold @1,000 Convoy Brothers in 4 hours total time spaced out over 3 days (plus preview) – leaving the booth about 88% of the time with ZERO Convoy Brothers to sell).

And while I don’t know the exact circumstance of certain buyers getting the boot from D23 Expo … it is puzzling when the ENTIRE ENDEAVOR is a buying forum to complain about someone buying? 🙂 Instead, it should’ve been “You’re out of the order! The system is out of ORDERS … of which I want to place more!” I think that’s how the quote goes.

Summary.

Don’t be stupid and sell things to people who want to buy them.

Make more money.

We want to give you our money, why do you not want it?

If you only want soft marketing gushy feelings towards you? Hold up a puppy and give us free CARS – otherwise, as an alternative, we’ll like you almost as much if you let us buy things from you.

Do not annoy us by NOT selling to us.

Psst, stop already – CLOSE THE DEAL.

 

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