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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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17 Comments

  • PopeMobile says:

    Good article Met. I do have a different view of this than others though. I understand Mattel’s decision to limit this to 1000 units and honestly I’m glad they did that. For guys like me that base a large part of our collections on rarity a set like this is a wonderful addition to our collection. In order for Mattel to continue to appeal to collectors like me and keep me “in the game” they have to continue to release exclusives and limited run production items. Otherwise I would lose interest. My kids have a bunch of cars they play with but me (dad) has his own private collection that is sealed and special to me. In order to continue I need to have limited production items to add to it.

    Case in point – if any of you watch the TV show Pawn Stars you may recall an episode a few years ago when a guy brought in a large Matchbox cars set. All of the focus was on the rarity of his items, the exclusives, the most valuable pieces, and ones limited on production runs. No one asked or cared about his common cars or pegwarmers. It was all about rarity, value, condition, and demand for those items. I feel the same way about my Cars collection. The longevity of the line depends on c collectors like that guy and me where some items are limited, rare, and yes valuable.

    (MET: I think every line is different. I’m just saying that Mattel is vastly underestimating the audience for CARS … I would safety say that out of 1,000 releases on cards (single or multi-pack) and box sets, you’d be hard pressed to find maybe just a handful of CARS (less than 20 or 2%) that will still sells for at least your money back or much, much more – sure, limited is nice but limited doesn’t necessarily make it a huge collectible nor does a huge production make it less sought after (look at prices of THE KING or THE TUNERS online). I’m not saying make 100,000 of everything – just that 1,000 is clearly too low and for the manufacturer, their totally random process shortchanges themselves & us with CARS because they figure there’s no market except for ONE exclusive a year at this rate … and I would also note that NO OTHER diecast line in the US can claim that 98% of their last 1,000 releases are worth more than you paid for them).

  • hollywood7 says:

    Thank you, Thank You, Thank You……

    Everything you say is so true and for someone who lives in Australia (or any where else in the world) we HATE Mattel with a passion!!!! Not only do we never get an exclusive (well maybe 1) but we have to pay more for standard items and some times much more for the exclusive from eBay. Thanks to your readers (one in particular) I have been able to get most of the cars i want but sadly there are times like convoy brothers that make we want to just give up!

    One day toy companies will understand we want a limited number so they are collectable but not that limited that you cant get one. I know, MET you should take over distribution and we might all be happy and Mattel would make more profit… Ahhh its OK to Dream.

    Thanks for the great article and keep up the FANtastic work, i said it a long time ago and ill say it again, Take 5 min a day to drop in and your life will be much better..

    Cheers form Down Under

  • picketoybuyer says:

    WELL – is there any value in owning the Convoy Brothers that were on display at the Expo, because my pre-seller bought them for me otherwise I wouldn’t have any!! But surely there has to be added value that I won that set even with the motor oil box??? Not sure how he weasled them to sell them to him but he did, and Im happy about that!

    NICE post MET!

    Nick

  • jestrjef says:

    Great read Met … seems silly that a company WOULDN’T want our money … stupid actually … we have always said if they would make it, we would by it … new molds, characters etc … finish something you start … we will buy it! PLEASE TAKE MY MONEY!!! LOL

  • Wraukn says:

    Nice write up, Met!

  • Matersgrlfriend says:

    Love it and completely agree, especially with that last line :) . And by the way, even if they took presales and sold as many as possible to everyone who wanted one at the event, there would still be a big ebay aftermarket because there are always those people who are like, hey what’s this Convoy Brothers thing and where can I get one?

  • jcamdenlane says:

    I just don’t believe that any of these toy manufacturers are naive. I believe exclusives are intended as marketing on ebay to help sell entire lines. Ebay is the center of the collector universe. Worldwide. A collector community, whipped into a frenzy, demonstrates the viability of the entire product line. The exclusives themselves probably are a breakeven unit, at best, but indirectly sell the next 100,000,000 Finns to big retailers. That’s where their real money is. Big shipments that take advantage of all their efficiencies of scale. Production cost on those convoy brothers probably nears actual sale cost and whatever’s left is probably eaten up by soft costs of selling at the event itself. Upping the production run 3 x wouldn’t change that. 3 x nothing is still nothing. The profit in those is in the buzz they generate. They’re global marketing tools.

  • MackDaddy says:

    Yeah! What you said! Who’s responsible for this train wreck? “The motors running at Mattel, but no ones behind the wheel.” :roll:

  • MoMcQueen says:

    Well put. Thank you. 

    As the drama unfolded that weekend (all fall-out rained down last week) I got that 30-kids-lined-up-for-five-ice-cream-cones feeling you describe. I’ve begun to wonder if Mattel even likes its collectors and/or Cars fans. Could they REALLY have that drastically underestimated demand for this set? Do execs really not know what we actually WANT to buy from this line? Or do they do stuff like this for the expressed purpose of standing back to laugh at us while we fight with each other as if it’s crusts of bread thrown into a crowd of starved people? That’s what collecting Cars feels like to me sometimes. (And, seriously, don’t get me started on how D23 organizers handled this whole fiasco.) 

    It’s exactly the kind of situation that leads to hoarding. Mattel is creating artificial demand for something. And they simply CANNOT be doing this by accident. That’s my feeling. They’re too well-established. It’s not like they fell into toys yesterday. 

    Take Uncle Topolino’s band, for example. Three (or four) stores in Canada seem to be at the epicenter of distribution of it right now while no place else appears to have it. I’m in one of those cities. Can I find a set? Heck, no. They’re all for sale on eBay. While I LOVE eBay, this time I can’t justify paying up to $60 for something I could have had for $13 or so if I’d been the one at the doors when the store opened at 7 am. Do I blame the guy who’s bought them all? Not really. It’s how things work now. I don’t much like it at times but this is how the game seems to be played and I’m one of the people playing it. No one FORCES me to collect Cars for my kids. I could collect rocks, or seashells, or twigs! Those things are in plentiful supply. And free.

    I do, however, wonder if there’s some etiquette to collecting that has been lost in recent years. For example, I can’t leave the Cars section in a store without cleaning it up. And I make darn sure that anything new and good is at the front of the pegs so other people see it when I leave. And I make sure there’s still something good left behind when I depart. I WANT other people — kids especially — to get excited when they find it sitting there. And that means NOT buying every CHASE car that I see. And there’s no difference to me whether a collector walks into a store and buys all of the hot item for trade as opposed to resale: it’s the same thing. Overzealous purchasing for the purposes of trade is no more noble than doing it for resale. Again, I love resellers, both the ones licensed and authorized by Mattel to sell whole cases and those Johnnies-On-The-Spot. These are the people I have to thank for my collection. 

    I wonder, though, what we’re doing as a community to keep this problem in perpetual motion. Were there unwritten rules to the etiquette of collecting that people used to abide by? Have they been forgotten or set aside? Or is all fair in Cars and war? I’d really like to know. 

    (‘Let them eat cake,’ Mattel said.)

  • cac1959 says:

    Very well written, Met… spot on.

    • valdacarr says:

      Cac1959, You said it!

      Thanks Met, maybe someone at Mattel will read this and start the hamster wheels spinnin

      creak, creak, creak

      (MET: Nice touch with the SFX :lol: ).

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