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TRU raises price on "retro-action" figures

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  • Duncan
    Museum focus-groupie
    • Jun 27, 2009
    • 1542

    #61
    Originally posted by geoffdude
    Raising prices on any product is not GOOD business (basic business 101). Adding MORE value to a product for current price IS good business.
    I'm sorry, but I disagree on this point. It is Mattel's responsibility to maximize shareholder value by maximizing the net present value of all future cash flows. Sometimes, that translates into price increases.

    For example:

    If the figs cost $10 to make, and they wholesale for $15, Mattel makes $5 profit per fig. If they sell 10,000 of them, that's $50K profit.

    Raise the wholesale price to $18, and that's $8 profit per fig. Now, they need to sell only 6250 figs to make the same $50K profit. I'd argue that sales wouldn't drop off by 3750 from 10,000.

    So, if they sell 8000 figs at $18, the profit is then $64K. Mattel has done the right thing by raising the price, even at the lower sales volume...assuming they order fewer of them and don't have to eat 2000 unsold figs.

    Now, I have no idea what Mattel's real numbers are. This is just one hypothetical scenario. However, you can plug different numbers into the calculations and still reach the same conclusion - that raising prices can be the right move, if sales don't decline past a break-even point. Mattel wants to make the most profit that it can, and not necessarily sell the most product that it can.

    Most of the arguments against raising prices seem to be that A) TRU already has villain peg-warmers, and B) sales will drop significantly, jeopardizing the line. If I were Mattel, I'd produce a higher percentage of heroes to villains from now on, and I'd be prepared to see a certain amount of decline in sales. And if sales dropped catastrophically, I'd be prepared to drop the price back down. I've got to think that Mattel would be prepared for that.

    Just to be clear, I'm not debating the morality of the increase. As a customer, I'm not any happier to see the price going up than anyone else on the board. I'm just saying that the numbers might make sense. Come to think of it, maybe the best response is to buy stock in Mattel, and be on the receiving end of the increase.
    Last edited by Duncan; Jun 20, '10, 9:29 AM.

    Comment

    • blastphemey
      Persistent Member
      • Jun 11, 2008
      • 1114

      #62
      wow^^ im not sure about them raising the price though, because they arent selling at $19.95( at my TRU anyway) so they certainly wont sell at $25. although im not sure i can compete with your logic duncan

      Comment

      • trekman101
        Persistent Member
        • Feb 6, 2009
        • 1432

        #63
        When I started this thread I knew it was going to be a hot topic so let me clear some things up....Mattel has committed to this line for 3 years 24 figures irregardless of sale fluctuations(Doc has stated this many many times)...so let us understand, if the line dies it will not be till then.....believe me,Mattel feels these figures should have always been $25 or more.....sales tell them they are more right then wrong......the next Matty exclusive figure may be more than $20(maybe $30?).....if Mattel raises wholesale prices it will also affect Diamond and its retailers,so the price spread between them and TRU wil likely stay the same...... if Mattel doesn't make money on this line it will not affect them at all,so we really have no leverage on them...sure they want it to do great but they are not going to loose sleep over it...they know in the long run people will be glad these figures were made at all(on another note,if Hasbro wants to make a retro Marvel line...THEY WILL...it might be way more superior....and Mattel isn't concerned)....I have been told by a district TRU manager that the Mattel retro line sells well and that it is normal for some stores to sell out fast while others sell them very slow...this happens to most toy lines they carry.....wave one was a test and Mattel will likely correct production numbers for certain figures(same over all total per wave...with higher numbers of heroes made)aiding the peg warmer trend....I have stated what is....not speculation....I know the figures are expensive but many things we want to buy generally are....if you don't want to pay the high price and wait you can but some figures may go out of production leaving you scrambling to find them and then if Mattel re-issues the figure I bet it isn't the same(some variations will be put in play)...then you will have another issue to deal with....I have a TRU rewards card and they are always sending me discount coupons...this helps me save money ....the decisions are yours but the line is going on so you have to figure out how to deal with it...one last thought...if the line ended today every one would ***** and moan how we got screwed....we can't have it both ways
        Last edited by trekman101; Jun 20, '10, 11:32 AM.
        "Thats the ticket laddie"

        Comment

        • drmego
          EMCE Toys
          • Jun 15, 2001
          • 2411

          #64
          I never said anyone had to like the idea of a POTENTIAL - not acutal - price
          increase. One TRU in Brooklyn is not ALL stores.

          And yes, I am glad to tow Mattel's line (whatever that is) because thanks
          to them, new megos are on TRU's shelves. I am happy with the character
          choices, and look forward to the future.

          I leave speculation about the future to the crystal ball experts. I am enjoying
          today.
          www.drmego.com
          www.megoman.com
          www.emcetoys.com

          Comment

          • enyawd72
            Maker of Monsters!
            • Oct 1, 2009
            • 7904

            #65
            Originally posted by ctc
            >there will NEVER be any MARVEL EMCE Mego-ish figures

            I wouldn't say never. All sorts of things can happen. Hell; how many folks thought we'd never see Mego style figures again?

            >Many toy lines never get beyond a wave 2. The factors for why are too many to list.

            Maybe that's why they want the price increase? To make the quid before precedence says the ride's over.

            Don C.
            Despite Hasbro's Marvel toys, Diamond is still producing it's Marvel Select line of figures, and Diamond already has an established relationship with EMCE, so it most definitely IS possible to get an EMCE/Diamond Marvel toyline.

            Sorry Geoffdude, you don't know everything.

            Comment

            • megoscott
              Founding Partner
              • Nov 17, 2006
              • 8710

              #66
              Not a big deal, but it's Toe the Line, not Tow.
              This profile is no longer active.

              Comment

              • stabilio
                Persistent Member
                • Feb 10, 2002
                • 1025

                #67
                There have been stores in the New York metropolitan area selling these for $22.99 since the day they first showed up. For whatever reason, its only been a few locations. The rest of the country has been 19.99. So really, quit the whining until you see them for $22.99 because this thread is just going to be a waste of space when they show up at $19.99. Because as it is, this whole thread is based on what? What a TRU employee at one store told one person?

                If they pop up at 22.99, commence your whining. Though even then you can still order them from Amazon for 19.99 with free shipping.

                Comment

                • samurainoir
                  Eloquent Member
                  • Dec 26, 2006
                  • 18758

                  #68
                  Just to give you guys the Canadian perspective, I would love to see the figures at $22.99 at TRU, since thus far the only prices I have seen are generally around $28 in the local comic shops, with the exception of one store which sells them at $25. I'm wondering if Canadian TRU will even be getting the Retro figures given the fact that I've yet to see any.

                  I would have accepted this in years past given the exchange rate, we are used to paying overinflated prices on pretty much everything from toys to books to comics to CD's to DVD's etc etc.

                  However, given the fact that we are pretty close to par with the US dollar makes this kind of gap between US and Canadian prices a bit frustrating. Particularly when you look on the packaging and see that it's packaged locally!
                  My store in the MEGO MALL!

                  BUY THE CAPTAIN CANUCK ACTION FIGURE HERE!

                  Comment

                  • Meule
                    Verbose Member
                    • Nov 14, 2004
                    • 28720

                    #69
                    Originally posted by stabilio
                    If they pop up at 22.99, commence your whining. Though even then you can still order them from Amazon for 19.99 with free shipping.
                    Unfortunately I can't. I'm already getting screwed on shipping, so forgive me if I don't look forward getting screwed again on the price
                    "...The agony of my soul found vent in one loud, long and final scream of despair..." - Edgar Allan Poe

                    Comment

                    • geoffdude
                      Banned
                      • Apr 18, 2009
                      • 286

                      #70
                      Originally posted by Duncan
                      I'm sorry, but I disagree on this point. It is Mattel's responsibility to maximize shareholder value by maximizing the net present value of all future cash flows. Sometimes, that translates into price increases.

                      For example:

                      If the figs cost $10 to make, and they wholesale for $15, Mattel makes $5 profit per fig. If they sell 10,000 of them, that's $50K profit.

                      Raise the wholesale price to $18, and that's $8 profit per fig. Now, they need to sell only 6250 figs to make the same $50K profit. I'd argue that sales wouldn't drop off by 3750 from 10,000.

                      So, if they sell 8000 figs at $18, the profit is then $64K. Mattel has done the right thing by raising the price, even at the lower sales volume...assuming they order fewer of them and don't have to eat 2000 unsold figs.

                      Now, I have no idea what Mattel's real numbers are. This is just one hypothetical scenario. However, you can plug different numbers into the calculations and still reach the same conclusion - that raising prices can be the right move, if sales don't decline past a break-even point. Mattel wants to make the most profit that it can, and not necessarily sell the most product that it can.

                      Most of the arguments against raising prices seem to be that A) TRU already has villain peg-warmers, and B) sales will drop significantly, jeopardizing the line. If I were Mattel, I'd produce a higher percentage of heroes to villains from now on, and I'd be prepared to see a certain amount of decline in sales. And if sales dropped catastrophically, I'd be prepared to drop the price back down. I've got to think that Mattel would be prepared for that.

                      Just to be clear, I'm not debating the morality of the increase. As a customer, I'm not any happier to see the price going up than anyone else on the board. I'm just saying that the numbers might make sense. Come to think of it, maybe the best response is to buy stock in Mattel, and be on the receiving end of the increase.
                      'Morning all,

                      You touch on another issue not really discussed in detail within this thread yet. The possibility that the production "quantity" my be going down (which I and others have brought up elsewhere) .. this may be THE reason for any future price increase if it's to happen.

                      Basic production cost remain fixed I would think, but if lower production runs are to happen then there's less product to provide at retail for the profit margin needed to keep the line going. Thus price per unit must be raised.

                      regards,

                      g.

                      Comment

                      • Mikey
                        Verbose Member
                        • Aug 9, 2001
                        • 47258

                        #71
                        There's a common misconception that most action figure collectors have endless amounts of money to invest in their hobby.
                        Seeing a Mego Ironman sell for $10,000+ on ebay doesn't help dispel this misconception to the general masses.

                        People don't notice more $5.00 Mego loose Spocks are sold than $10,000+ Ironmans.

                        The truth is some people have money and don't mind spending the extra scratch and some people don't - and a few extra bucks can decide whether someone buys a figure or not.

                        The second catagory (people that can't afford spending the extra money) far outweighs the people who don't mind.

                        This will translate to fewer sales until the figures are marked down.

                        This will inturn give the company a false impression the line is starting to fail and should be cancelled because of poor sales.

                        They should leave well enough alone and don't mess with a good thing (the line doing well and making them money)

                        That's my opinion.
                        Last edited by Mikey; Jun 20, '10, 11:16 AM.

                        Comment

                        • geoffdude
                          Banned
                          • Apr 18, 2009
                          • 286

                          #72
                          Originally posted by trekman101
                          When I started this thread I knew it was going to be a hot topic so let me clear some things up....Mattel has committed to this line for 3 years 24 figures irregardless of sale fluctuations(Doc has stated this many many times)...so let us understand, if the line dies it will not be till then...
                          This is not actually true.

                          Couple of things. Doc noted that Mattel was "committed" to the line. And also that there were "plans" for 3 years worth of figures.

                          Neither of these statements mean there's a 100% certainty that all 24 figures will make it to shelves. Business conditions change fast, and many toy lines have met a quick demise as a result. Mattel's position is that they are doing the line, if it does well, for 3 years, but they probably reserve the right to drop it like a hot potato (now) if sales are flat.

                          Not saying I don't want 'em all.. just that we may not get them all.

                          regards,

                          g.

                          Comment

                          • geoffdude
                            Banned
                            • Apr 18, 2009
                            • 286

                            #73
                            Originally posted by drmego
                            I never said anyone had to like the idea of a POTENTIAL - not acutal - price
                            increase. One TRU in Brooklyn is not ALL stores.

                            And yes, I am glad to tow Mattel's line (whatever that is) because thanks
                            to them, new megos are on TRU's shelves. I am happy with the character
                            choices, and look forward to the future.

                            I leave speculation about the future to the crystal ball experts. I am enjoying
                            today.
                            I understand your situation here Doc., but your post was about what really? Were you saying price increases are "justified".. or were you saying something else?

                            I guess my main point was that you really didn't say, or add, anything to the threads main point one way or the other.

                            Speculation can be contained if facts are provided.

                            BTW - I'm enjoying the retro-line too; packaging goo, production quality, and price-point issues aside.

                            regards,

                            g

                            Comment

                            • geoffdude
                              Banned
                              • Apr 18, 2009
                              • 286

                              #74
                              After coke & vodka, and coke and vodka, and coke and vodka, etc., .. it's toq, toe, tow, tie or tue...

                              Comment

                              • samurainoir
                                Eloquent Member
                                • Dec 26, 2006
                                • 18758

                                #75
                                Originally posted by Mikey01
                                There's a common misconception that most action figure collectors have endless amounts of money to invest in their hobby.
                                It would be interesting to see what the real breakdown between collectors and kids has been for this retro line. While Collectors are demonstrating that they are an economic force within the mainstream retail world of Toys, isn't TRU's bread and butter still the kids? As Collectors ourselves, I think it's difficult for us at times to see the forest for the trees.

                                Have you seen how much parents are willing to drop at TRU for other toylines for their children?

                                The truth is some people have money and don't mind spending the extra scratch and some people don't - and a few extra bucks can decide whether someone buys a figure or not.

                                The second catagory (people that can't afford spending the extra money) far outweighs the people who don't mind.
                                I really don't think the manufacturers and retails are under any illusion that most collector's have endless deep pockets, but let's put this into perspective. $22 isn't really that big an issue for most folks in the middle class to scrounge up for one figure. For four figures, it's $88 for this past year. If two dollars makes that much difference, then the sad, harsh reality is that Mattel probably doesn't really care about whether you can afford it or not. They are generally shooting for those that can drop five bucks for their morning cup of coffee, continue to fill up their gas tanks to get to work no matter how the price fluctuates, who are upgrading to HD and Bluray, own ipods, and outfit their kids at the Gap y'know? If there are less and less of those folks, then I guess that is probably why prices are increasing. It's kind of like a snake eating it's own tail, but this is the state of our world today. (can you tell I'm living in the city that is smack dab in the G20 controversy this week?)

                                Given how successful MattyCollector has been, I'm pretty sure Mattel isn't sweating it when it comes to the collectors. I think we've all observed that hardcore collectors are willing to beg, borrow or steel to fund their habit. Anyone who works in a comic book store will tell you this.
                                Last edited by samurainoir; Jun 20, '10, 2:06 PM.
                                My store in the MEGO MALL!

                                BUY THE CAPTAIN CANUCK ACTION FIGURE HERE!

                                Comment

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