1/6th Figure Costs

[pixletwin]

I can't imagine what oil costs have to do with the rising costs of bread, eggs, milk, paper, and toys. Really, its nor like our economy depends on it or anything.

 

[IrishJedi]

Ok... as long as everyone quits saying these companies are price gouging and admit that all of them are going up, so it really must be because of rising costs...

I almost always stop short of using the "gouging" word. The truth is somewhere in between.

Costs of materials/production are rising, yes... but here is the cold hard fact: These costs are not raising at nearly as drastic a rate/percentage as the goods are. If it were 1:1 (or even close) then you could blame it entirely on the current economy, gas, materials costs, etc. But that dog ain't huntin', as they say.

Again, it's somewhere in the middle. These companies aren't being completely greedy gougers... but the prices of their (non-essential) items have been rising at rates that are alarmingly higher than inflation.

 

[Darth Caedus]

My view on figure prices are elastic. with the price increase, I'm going to buy less. I know some of you guys are the opposite, but I wish I could be that way

 

[pixletwin]

Correct me if I am wrong, but the plastics used in collectibles does contain petroleum products.

 

[MaulFan]

At this rate, I am either going to have to cut back seriously in 1/6 or devote entirely to it.

Right now, my collectible of choice is 1/6 figures, if offers a diversity of properties and display options. However, I do like statues, maquettes and things like that too. Right now, I find a way to mix in that stuff with figures, but at this rate, I'll either have to commit solely to figures, and even then make cuts I might not now, or make big cuts and still mix things up.

As far as the makers go, the only one that hasn't hurt me yet with it's increases is Hot Toys. I've only gotten Rocky, Rambo and Aliens and Predator from them in the past and now add POTC to the mix to, but of those, Only Rocky and Rambo have changed much since I've been buying, and so few come out in those lines it's not painful to bite on.

Medicom however, is probably the company forcing me most to really scrutinize their products based on price now with their hikes. Granted, everyone is having increased production costs and raising prices so quality won't necessarily change with price. However, of the 3 big companies in 1/6, Medicom is the one that's always seemed overpriced to me, and as the price goes up and figure quality stays the same, they're looking less and less worth the money, even if some figures can only be had through them.

Hot Toys is fortunately a company where they do a lot of properties I like but fortunately, only a figure or two every so often from those properties that I feel a need to add to my collection, so rises with them don't hurt me, and I feel their products are worth the money I pay for them.

Sideshow is probably the most painful change for me. I started buying their figures with the Star Wars line, which is above all my favorite property, and when it started, it was very cost effective and easy to collect the entire line and really build up a nice collection. Today, I still feel the same about their quality of Star Wars figures and I would like to have them all, providing they don't start branching off into too obscure of a character, then I might pass, but with the rising costs of Sideshow figures, I forsee a time when I'll be passing on figures I'd have gotten a year or two ago because the prices of figures force me to be more selective.

 

[Darth Caedus]

Correct me if I am wrong, but the plastics used in collectibles does contain petroleum products.

DAMN OIL !!!!!!!!!!!!!!! It's changing my life !!!

 

[IrishJedi]

I do want to make it clear that I like Carl and think he's a good guy. However, its beyond me why someone as intelligent as he is would just blow off the economics of things as some excuse.

Because I just can't get over the math:

Rate of inflation: 2-4% (currently just over 3%)

Sideshow/Medicom Figure inflation: 10-20% (in some cases more)

Even if you factor materials and overhead margins (almost always no more than 3-5% when the economy is at its worst) it does not add up.

Again, I'm not crying "gouging" but I am pretty damn tired of people blindly using the current state of the economy as THE reason why these companies are raising prices so drastically. And I'm even more tired of my intelligence being called into question for point this out.

There is something else at work here than simply raising prices based on costs and inflation. There HAS to be. Because the numbers don't lie.

 

[Darth Caedus]

Because I just can't get over the math:

Rate of inflation: 2-4% (currently just over 3%)

Sideshow/Medicom Figure inflation: 10-20% (in some cases more)

Even if you factor materials and overhead margins (almost always no more than 3-5% when the economy is at its worst) it does not add up.

Again, I'm not crying "gouging" but I am pretty damn tired of people blindly using the current state of the economy as THE reason why these companies are raising prices so drastically. And I'm even more tired of my intelligence being called into question for point this out.

There is something else at work here than simply raising prices based on costs and inflation. There HAS to be. Because the numbers don't lie.

Yea, but ALL the costs of assembling a product and figure have gone up, so just saying that 2-4% inflation increase and saying that the figure price should increase 2-4% really isn't looking at the whole picture

 

[Shai]

Stop collecting 1/6..buy statues and PF.Price is better for the quality you get...

Also collecting aint for poor ass people......Like this guy on the commerce section who screwed a lot of people but was always looking for the cheapest deal.You know who I'm talking about....this hobby wasnt for him.

 

[IrishJedi]

Yea, but ALL the costs of assembling a product and figure have gone up, so just saying that 2-4% inflation increase and saying that the figure price should increase 2-4% really isn't looking at the whole picture

Accounting for worst-case (production & materials costs) and ADDING that to the rate of inflation (which is usually not what is done... it's usually one or the other) you STILL would not get any higher than 8%.

The reality is probably half of that (4-5%), at worst.

 

[Bat Eater]

damn economy, damn world, damn bush

 

[The Josh]

Costs of materials/production are rising, yes... but here is the cold hard fact: These costs are not raising at nearly as drastic a rate/percentage as the goods are. If it were 1:1 (or even close) then you could blame it entirely on the current economy, gas, materials costs, etc. But that dog ain't huntin', as they say.

Again, it's somewhere in the middle. These companies aren't being completely greedy gougers... but the prices of their (non-essential) items have been rising at rates that are alarmingly higher than inflation.

The thing is I think the cost of the others is raising pretty close but because it can be spread out because of there being so much more it just isn't quite as noticeable. The fact is the current economy is having a pretty good impact on it so yes that dog does hunt.

Lets face it these are made, shipped, etc with petroleum based products that in itself will drive the cost up. Then you factor in the shipping costs, manufacturing costs, license costs, etc and I'm sure the price has to jump more than normal. I'm not trying to be a dick but I really wonder how much you understand economics or the way everything rolls together. Yes, most of this stuff isn't raising at the same rate but here's a thought maybe thats because they where staying behind the curve and now have to play catch up.

Oil was $23 a barrel in 2002 and now is $125 which is nearly a 19% increase. Gas prices where only $1.40 in 2005 and are near $3.60 right now a 39% increase. Food Prices are up (Interesting quote from a CNN Article) showing just how much it rose in the first quarter of this year compared to the last quarter of last year.

The latest nationwide quarterly survey from the AFBF, which tracks supermarket prices for 16 basic grocery items, showed the total cost of its basket of goods rose to $45.03 in the first quarter of 2008, up 8% from the prior quarter.

So I'll state again either you have to admit world economy/oil is having more of an effect or you don't get the way it works.

Average Daily price of Oil per Day.

 

[The Josh]

Because I just can't get over the math:

Rate of inflation: 2-4% (currently just over 3%)

Sideshow/Medicom Figure inflation: 10-20% (in some cases more)

Even if you factor materials and overhead margins (almost always no more than 3-5% when the economy is at its worst) it does not add up.

The numbers do add up Carl. They allpoint at the same thing and thats the way the economy is right now and how oil is just going up at crazy prices everything is gonna go up. Not to mention any other production issues these companies run into as they make these things.

Again, I'm not crying "gouging" but I am pretty damn tired of people blindly using the current state of the economy as THE reason why these companies are raising prices so drastically. And I'm even more tired of my intelligence being called into question for pointing this out.

I'm pretty damn tired of you trying to find some conspiracy theory as to why its going up. Instead of "ACTUALLY" looking at the facts and seeing the big picture. As far as your intelligence being called into question the only reason it might be at all is because you want to act like there is some big secret as to why things are going up instead of just accepting that the economy is playing a fairly large factor.

Yea, but ALL the costs of assembling a product and figure have gone up, so just saying that 2-4% inflation increase and saying that the figure price should increase 2-4% really isn't looking at the whole picture

Its not only not looking at the picture its not taking the time to think it out. Not taking the time to add everything up and see where everything is going up.

 

[Shai]

 

[MaulFan]

Funnily enough, a mod started this thread

 

[IrishJedi]

So I'll state again either you have to admit world economy/oil is having more of an effect or you don't get the way it works.

Average Daily price of Oil per Day.

That would work for me as an excuse if the cost of oil was at least 70% of the overhead for Sideshow, Medicom, et al. But since it's probably 10% or less...

Here's what I think is going on:

- The costs and overheard in producing these products have indeed been raising. No rational person could disagree with that.

- Not wanting their profit-margins to be cut (or evaporate) these companies are being forced to raise the cost of the products to the consumer. This is completely normal, of course.

- We're seeing the costs raise much higher than the overhead or inflation would dictate, but I don't think it's a move to gouge or squeeze the consumer. It's what is called in some circles a self-correction and sliding the margins. Because these are businesses, they are pushing the end-buyer costs of these products up in order to preserve any profit margins for the forseeable future... and they're doing so right to the "risk point", which is an area where you are seriously at risk of losing many consumers. This very thread is a good indicator that this is exactly the case.

- It's possible that these toy companies may roll-back the prices some if sales plummet. Again, it' a risk. But at the end of the day, they're looking to hold on to their profit margin and probably pad it a bit due to the uneasy and unpredictable state of the economy.

Again, I don't blame them. But I absolutely will not buy the excuse that the current prices of these non-essential goods are directly resulting from the rising manufacturing costs, oil, inflation, etc. It's that PLUS the companies wanting to maintain the same amount of profit and also future-proofing them as well.

Whether they've raised them too much, too quickly will be determined by the consumers at large.

 

[The Craw]

Stop collecting 1/6..buy statues and PF.Price is better for the quality you get.

but i like dollies.

Funnily enough, a mod started this thread

things must have been getting quiet around here. gotta stir the pot a little to keep people coming back. kinda like sweeps week.

 

[MaulFan]

Interesting point you raise there Carl.

So you think the prices are being pushed to a point where on a normal slope, they'd be in say 5 years, but done now so that for the next 5 years, in theory, the prices will flatline and remain at the point they are at.

That's a pretty good thing for collectors in a way, it bites you in the ass now but overtime you do ok and at least you can prepare for it now instead of being broadsided later. Plus, if it's too much and customer base is lost, then they'll see they need to pull back and compensate in other ways.

 

[IrishJedi]

I'm pretty damn tired of you trying to find some conspiracy theory as to why its going up. Instead of "ACTUALLY" looking at the facts and seeing the big picture. As far as your intelligence being called into question the only reason it might be at all is because you want to act like there is some big secret as to why things are going up instead of just accepting that the economy is playing a fairly large factor.

I think my last post should put to rest any claims of a "conspiracy theory" on my part. I'm simply pointing out that there is much more to the prices on these TOYS being raised than simply the economy and oil prices. That's a straw man argument.

You can think I'm a financial dummy of you wish. But I know better.

BTW, raise your hand if you're a professional Project/Product Manager and have no consumer debt other than a home mortgage?

 

[The Josh]

That would work for me as an excuse if the cost of oil was at least 70% of the overhead for Sideshow, Medicom, et al. But since it's probably 10% or less...

Here's what I think is going on:

- The costs and overheard in producing these products have indeed been raising. No rational person could disagree with that.

- Not wanting their profit-margins to be cut (or evaporate) these companies are being forced to raise the cost of the products to the consumer. This is completely normal, of course.

- We're seeing the costs raise much higher than the overhead or inflation would dictate, but I don't think it's a move to gouge or squeeze the consumer. It's what is called in some circles a self-correction and sliding the margins. Because these are businesses, they are pushing the end-buyer costs of these products up in order to preserve any profit margins for the forseeable future... and they're doing so right to the "risk point", which is an area where you are seriously at risk of losing many consumers. This very thread is a good indicator that this is exactly the case.

- It's possible that these toy companies may roll-back the prices some if sales plummet. Again, it' a risk. But at the end of the day, they're looking to hold on to their profit margin and probably pad it a bit due to the uneasy and unpredictable state of the economy.

Again, I don't blame them. But I absolutely will not buy the excuse that the current prices of these non-essential goods are directly resulting from the rising manufacturing costs, oil, inflation, etc. It's that PLUS the companies wanting to maintain the same amount of profit and also future-proofing them as well.

Whether they've raised them too much, too quickly will be determined by the consumers at large.

You make some good points some of which I agree with but then you totally shot yourself in the foot by stating that the costs of these non-essentials have no direct result from these areas. Showing you don't even get your own point and show a total lack of understanding.
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Another interesting article I found about Toy Manufactoring Cost Increase

oy Production and Manufacturing in China and the Effect of Cost Increases

by Angel Morales

As a manufacturer or trader, you may be contemplating additional markets for future production of goods. Remember back in the day when Taiwan and Japan used to be the main production hubs where millions of items were manufactured? The labor cost used to be considerably lower thus making sense to have manufacturing facilities in both of those countries. Then the relay was handed off to China. China not only ran with it but absolutely ran over the competition. No other country had managed to develop so quick and so thoroughly when it came to production of goods.

While all of this sounds great for China, things are about to change.

A lot of Chinese industries have taken a hit where it hurts: the bottom line. The consistent increase of costs in China, during the last 24 months, have driven businesses and factories in China and Hong Kong to narrow their margins to numbers that would scare away the most risky investors in the US and around the world.

The Hong Kong trade Development Council announced in September 2007 that the labor costs (wages, social security contributions, welfare benefits, etc.) had increased by some 25% during the past 2 years. Consider also the increase in the cost of utilities in provinces where a lot of manufacturing facilities have roots: increases which range from 10% during off peak hours and up to 27% during peak production hours; and add the sewage treatment charges which have increased by almost 300% and you would certainly see why looking for a new production source should be at the top of your priority list in 2008.

Still feeling confident? There’s more. The US dollar which used to be the business monetary system of the world has suffered huge blows by virtually ALL major currencies. It is as expected, the RMB appreciation throughout the last two years, which has resulted in further increases of cost. There are no signs that the US dollar will make a comeback against the very strong RMB anytime soon, which has appreciated almost 10% compared to the dollar in the last 24 months.

Before you call your Operations Manager and ask him to begin looking for production facilities in Indonesia or in Vietnam, there is more that you need to know and be fully aware of. As if the increase in labor costs, utilities skyrocketing and depreciation of the US dollar were not enough, China’s latest move to further reduce the export VAT rebates is the punch that yields the knockout. Earlier in the year China did away with the rebate issued to certain industries and now has announced that another one, even more considerable, is to be expected in the next few months. That is a total of 3 reductions in less than 24 months.

Ok, so you are already on the phone with your VP of Operations but he/she is already aware of all of this. Your VP is now telling you that there is yet another factor to consider: a very important one. The soaring prices of raw materials have hit China and Hong Kong manufacturers HARD. Metal prices have almost double in the last 24 months, while some key metals such as copper and zinc have surged to 130% and 190% respectively.

The Chinese province of Guangdong faces the largest shortage of workers ever. In 2006, a record 2.5 million workers were needed and simply were not found. This year was not any better as the numbers provided were not promising: an additional 10% in workers and almost 30% in technicians. Several provinces have been obligated to raise their minimum wages and salaries in order to attract more workers. The increase of the minimum wage in several provinces (mainly the ones with highest concentration of workers) has increased from 12% to a frightening 22%.

It is said that you should not kick a person while they are down but the Chinese government obviously does not consider a factory a person, so to prove it, local governments in China have reported to be pushing ahead to expand the welfare offerings such as implementing housing funds under which enterprises are required to contribute no less than 5% of the worker’s wages.

So, what did you tell your Operations team? Don’t put Mr. Leoneli or Ms. Martinie on tomorrow’s flight to Vietnam to explore new factories (even though Mc. Donald’s is already doing so). You certainly need to look at other Asian countries and even Latin America, which seems to offer promising quality and pricing for future production of garments, ceramics, toys, candles, etc, BUT one thing is for sure, this transition will take some time. There will be no choice but to sustain a first round increase of pricing from China, and a second one and maybe even third one. Expect a minimum of 3 major increases in 2008.

While there is no tell how much of an increase you should expect, you should not be surprised if you see increases ranging from 10-15%. While this is not enough to cover all the changes and increases outlined above, it would be unrealistic for companies in China and enterprises around the world to pass on 100% of the increases to their end users. You might have some companies that might try to do exactly that and they will quickly leave the marketplace as consumers will simply not welcome companies that try, not only compensate for the increases, but try to make additional margins of it.

This is the time to strengthen your relationships with your vendors and partners. Shop smart and work with companies that are open about their strategies of cost increases. Educate yourself about the changes to come but most importantly, educate yourself and your team about WHY the changes will occur. Don’t forget to wear a seatbelt as the ride might be a bit shaky.