Action figure economics

[boss]

you forgot mold costs. probably the biggest single cost out there

[palitoy]

They're likely producing more units than everyone else, they're able to do it at a much cheaper price and they don't have to worry about insurance, factory fees, etc, because their other toys pay for that. Even licensing doesn't apply to Retro-Action. Sure, Mattel pays for the DC license, but Retro-Actions profits don't pay that bill. Mattel's countless other toy brands do.

Your assumption that the profits from one division carry the others isn't accurate. Taking and time and resources from more profitable ventures isn't how it works, some profits might be used in the development, granted but it's not free money. Product divisions must be able to carry themselves or it will no longer make sense for the company.

Factory time, development (using a 3rd part company), materials, sales are all carried forward by the product line, they are incremental costs. It's not a charity line, Barbie is not footing the bill.

Even licensing doesn't apply to Retro-Action.

That's not at all an accurate statement. It absolutely factors into the price, it's foolish to imply otherwise.

Are these things priced to the maxium? Yep! they are at the very breaking point of the disposable consumer dollar and that is obviously intentional but let's not embarrass ourselves saying they cost pennies and should be $12. Best case scenario, these things would be $16-17. That's Toys R Us's call BTW, not neccesarily "Mattys" Why are aren't they taking more heat here? As the exclusive vendor, they hold all the marbles.

I think the bigger rip off is MOTU, which Mattel shares no fees with and sells directly. They're $20 and are a guaranteed sale, I wonder if people are raging against that machine as much? They probably are.

[livnxxxl]

I have absolutely no issues at all with ANY companies making money. A company has to make money to continue to survive and provide us with the goods which is all good in my book.

What I would really like to know is how much the price of plastic is per figure? How much plastic/oil does it take to make one figure? Can anyone here answer those two simple questions for me?

I have heard the same argument over and over again about the price of oil has went up and the plastic is higher blah blah. So is the CEO's pay scale. You do not think that there is a large sum of money being made here from Mattel? When a company can afford to pay someone $12 million a year? I am not jealous of this fact at all I am saying that I think a lot of people here tend to kind of over look that "little" known fact.

And I know that all the money is not being made just off of the Retro's. Mattel has a lot of various products that they market and sell. I can guarantee you though that there is a good amount of money being made just off of the retros when all of the dust settles or else Mattel would not bother messing with them. Would it be enough profit to soley keep Mattel a float in the action figure business? No it would not. This is why Mattel is diversified like any smart company would be today.

I am not trying to sound negative here at all. Like a lot of others here I do like the fact that Mattel/EMCE/Dr. Mego is giving us the chance to have new stuff. That is super cool of them. However, Mattel is not doing it just for the fans out there.


Yes, We can choose to buy them at $20 or pass on them that is the great thing about it. We are not being forced to buy them. Although they sure do make it so very tempting. LOL!!

That is kind of like saying the Football/Baseball players are all about their fans. That is B.S. What about the fans when the players go on strike and throw their hissy fits because the are not getting paid millions more? I see where the fans really stand at and anyone with half a brain would/should see it to.

[ODBJBG]

In the case of Mattel, a lot of the stuff you factored into the cost is out the door. Mattel already has that stuff built into the infrastructure of the company. Retro-Action doesn't have to pay for those things. Barbie or whatever you want, already does.

EMCE and guys like CAW aren't making a ton on these guys, but Mattel is a different boat entirely. They're likely producing more units than everyone else, they're able to do it at a much cheaper price and they don't have to worry about insurance, factory fees, etc, because their other toys pay for that. Even licensing doesn't apply to Retro-Action. Sure, Mattel pays for the DC license, but Retro-Actions profits don't pay that bill. Mattel's countless other toy brands do.

Once Mattel pays off the cost to tool the original body, everything else is gravy. Mattel is making a high markup on these figures. It's easy to see that too, when EMCE and CAW are putting similar products on the market and are tiny companies by comparison, but are still able to produce them at a comparable (and in many cases cheaper) price than what Mattel is doing.

I'd like to say that Mattel will drop the price once the tooling for the original body is paid off, but they long since paid off the tooling for DCUC and have went on record as saying so. Instead of a price decrease, the price of DCUC went UP once Mattel had paid for the major buck tooling.

Sorry, but Matty is taking a big slice of this pie because he's convinced that people will pay for it. He's right and that's the whole MattyCollector model. It's just being used here as a TRU exclusive.

[Random Axe]

I personally don't think the 20 dollars for Retro Action is all that out of whack considering all that goes into making one for mass production. I think a lot of the discontent has to do with cost vs. quality, which is a completely separate animal. If we examine what's involved money-wise in simply making a figure, it's odd that anything ever gets done as most of the money is up-front with no sales guarantee. I'm sure Doc or the Castaway guys can chime in on this and blow up my cost structure theories, which is all this is, theory.


Let's say we are a small toy company with 5 employees, better than average production facilities and decent distribution. We'll be called Jackson Figures. We have recently acquired a license to produce The Atomic Avenger. We have decided on a 10,000 unit production run initially, so let’s see how the costs affect the product and it’s retail price.

Licensing fee
Original head sculpt
Plastic to produce bodies and parts
Rubber to make the heads
Rubber to make boots
Paint application tooling
Material for 10,000 figure’s clothing
Insurance to cover manufacturing flaws and lawsuits
Factory fees for manufacturing
International phone bills contacting factory daily/weekly
Packaging design
Paper board for backer cards
Plastic figure bubbles for card
Shipping overseas,customs and tariffs
Advertising in trade magazines and related publications

Now keep in mind all of the above is prior to whatever wholesale deal has been struck with vendors/retailers. There will be a variance in wholesale and projected gross profit by each retailer, so that’s a unknown quantity. The usual markup will be 23-30 percent on average.

After factoring all of the above costs into the final product, which is of very good quality, we aren’t really making a great deal on investment. The following numbers are guesses, but I’d bet I’m close.

Final cost per figure – 9 dollars
Wholesale cost to retailers – 13 dollars
GP markup – at a 25 percent margin, around 3.25
Suggested retail price – 16.25
Jackson Figures gross profit – 40,000 dollars for 8-10 months of work

Good luck making any money in this industry. The key to everything is large production runs and cost management. You’ve got to make your money on sheer volume, we’re talking 100,000 plus units. I sincerely doubt Mattel’s runs are consistently that high for Retro Action, so they make up the difference by increasing the wholesale. Talk to any comic shop owner and see how much they are paying Diamond for those figures. At a 17.99 cost, they have to turn around and go 25 dollars minimum to make anything at all since they might not have a customer base established for that product.

I have mass respect for EMCE, Castaway and ZICA for going through all of this. It's obviously a love and passion and is greatly appreciated.

As usual, I'm probably way off.

Scott