MOTUC Q&A's From Around the Net (3/15/2012)

[enoch]

People you have had a year and a half to save for granny! You can reuse some of his parts for the dinosaurs

[EatTheseCrackers]

People you have had a year and a half to save for granny! You can reuse some of his parts for the dinosaurs

I LOVE the idea of getting the old dinosaurs into this line but is that realistic? So much negative energy being directed towards the Wind Raiders performance by Mattel - would they consider the prehistoric beasts at this point?

I assume they'll be scaled back in size of course.

[Berserker79]

Imagine, if he doesn`t sell "okay".

Imagine, he`ll sell terrible.

Imagine, when TG realises that most casual customers won`t buy him. I´m not talking about all buying hardcore fans. I`m talking of the majority of MOTU fans. Do someone think, most of the fans would buy an around 100$ (without shipping) expensive piece of rotocast plastic?

I don`t think so.

[mekaneckpain]

2. In the upcoming Granamyr figure, is the plan to make him fairly poseable or is he likely to be a big figure that's more static like the SDCC Stay Puft? Are there any early plans to try and get Granamyr to a certain level of articulation?

His articulation level will be similar to Tytus.

So in other words, it's gonna be $80 for a crappy rotocast toy with horrible articulation.

And now it's going to be between $80 and $100. The price just keeps going up and up. sigh!

[bcrduke]

Which is why I think ultimately it was a poor decision. And watch, it will be used as a "you guys aren't getting other big items you really do want because you didn't buy enough Granamyr's".

Good point. The following items would likely sell more than Granamyr: Battle Ram, Roton, Point Dread & The Talon Fighter. If Granamyr tanks, I doubt we will see any of those

It doesn't matter because Granamyr will be released at the worst possible time, when no one can afford him due to all the figures that will come out in the same month due to all of these stupid delays. He'll end up coming out when there like the anniversary figure, 2 normal figures, and the quarterly oversized, along with when a lion will come out, and a DCU figure and oversized figure.

This is SO important. I hope they will delay Granamyr until March or April of 2013. It's just easier to manage the cost then. The holidays are not a good time - it's not like in a kids' retail line where expensive holiday-gift style items sell well.

All of those numbers are being pulled out of the air. There is no evidence to show that their making anywhere near 100% profit on any of their lines, never mind 500-700%.

I ALREADY said that I was just trying to make a point and making up numbers.

However, Toyguru said, "the line is paying for itself five times over" at Toy Fair two years ago. So either it was (and likely is more so at this point), or he was fibbing, and considering the high re-use of parts, and the fact that Mattel OWN MOTU, I am inclined to believe the line does well for Mattel.

I also believe, that like most companies, their goals for profit margins are crazy huge.

I don't get it they use rotocast to cut down on the cost yet people are griping about the cost on that if he was made like a regular figure the price would be even higher and guess what the same people plus more would be griping.

I don't think anyone is griping about rotocast. We are upset because roto-cast is a cheap way of making larger-size items, yet we will still be paying $100 for a roto-cast dragon

This isn't wise. I just want to see Granamyr sell well... I don't want to see this fail.

[Super He-Man]

Yes, thank you, Sir Obvious -- I ALREADY said that I was just trying to make a point and making up numbers.

You're welcome, Captain Know-It-All. I was responding to others who are taking those numbers as gospel, or close, anyway. People are still making suggestions based on the assumption that you must be at least CLOSE to correct, of which there is no proof.

As for whatever Toyguru said, I doubt he pulled out a calculator before making his comment. It could have easily been
a) an off the cuff comment meaning "the line is doing great" that didn't reflect actual numbers
OR
b) he did not explain himself clearly (which has happened before) and he just meant that the line is making (around) 5 times more profit than needed to be considered successful.

If a tiny line like MOTUC is making 500% profit or anything close, then a popular retail line like Barbie must be making like 30,000%. Does anyone really believe that?

[dorrmann]

Guys, please stop the back-and-forth and the name calling.

[bcrduke]

You're welcome, Captain Know-It-All. I was responding to others who are taking those numbers as gospel, or close, anyway. People are still making suggestions based on the assumption that you must be at least CLOSE to correct, of which there is no proof.

As for whatever Toyguru said, I doubt he pulled out a calculator before making his comment. It could have easily been
a) an off the cuff comment meaning "the line is doing great" that didn't reflect actual numbers
OR
b) he did not explain himself clearly (which has happened before) and he just meant that the line is making (around) 5 times more profit than needed to be considered successful.

If a tiny line like MOTUC is making 500% profit or anything close, then a popular retail line like Barbie must be making like 30,000%. Does anyone really believe that?

Do you honestly think Mattel is producing this line out of the kindness of its "heart?"

Do you NOT think they are making a sick profit?

That's how business works.

And clearly Scott's comment wasn't an indication that he believed the line is making precisely "five times" what they are spending. Do you really think I took that literally? He's supposed to promote the idea that the line is healthy.

And I'd say Barbie makes a KILLING... especially considering how much part re-use there is.

As for your "Know it All" comment: your explanation of how you're laying into others for using my numbers (which I'd clarified as being totally made up for the sake of illustrating a point), sounded really snarky. Again, if you want to believe that Mattel isn't making a TON of profit on these figures, that's your right. I can't go along with that.

Call me a Know-It-All... I really don't care. I removed my "obvious" comment, though it really wasn't supposed to be harshly mean.

[RockinHard]

Do you honestly think Mattel is producing this line out of the kindness of its "heart?"

Do you NOT think they are making a sick profit?

That's how business works.

And I'd say Barbie makes a KILLING... especially considering how much part re-use there is.

As for your "Know it All" comment: your explanation of how you're laying into others for using my numbers (which I'd clarified as being totally made up for the sake of illustrating a point), sounded really snarky. Again, if you want to believe that Mattel isn't making a TON of profit on these figures, that's your rigth. I can't go along with that.

Call me a Know-It-All... I really don't care. I removed my "obvious" comment, though it really wasn't supposed to be harshly mean.

I am hereby declaring that "snarky" is BCRDuke's word. Others shall not use it. This I demand!

[bcrduke]

I am hereby declaring that "snarky" is BCRDuke's word. Others shall not use it. This I demand!

HA. It's the best adjective to describe internet jabs (intentionally harsh or otherwise). I do like that word.

[Dr Kain]

People you have had a year and a half to save for granny! You can reuse some of his parts for the dinosaurs

It's kinda hard to save for Granamyr when YOU DON'T HAVE A JOB!!!

The only reason I am getting all of the figures I am now are because 1. I had already committed to the sub long before I lost my job and 2. I had money for the subs' first few months saved up. However, after next month, that money will be gone.

[shadowfall1976]

Guys, please stop the back-and-forth and the name calling.

But that last batch was actually funny

It's kinda hard to save for Granamyr when YOU DON'T HAVE A JOB!!!

The only reason I am getting all of the figures I am now are because 1. I had already committed to the sub long before I lost my job and 2. I had money for the subs' first few months saved up. However, after next month, that money will be gone.

Yeah money is the main first and foremost reason I am a picker, because I can't commit to a full year of figures at all. The second being I don't want all of the figures anyway, so it works out, somewhat.

[enoch]

It's kinda hard to save for Granamyr when YOU DON'T HAVE A JOB!!!

The only reason I am getting all of the figures I am now are because 1. I had already committed to the sub long before I lost my job and 2. I had money for the subs' first few months saved up. However, after next month, that money will be gone.

And 3. If you dont have a job why worry bout toys?

[bcrduke]

All of those numbers are being pulled out of the air. There is no evidence to show that their making anywhere near 100% profit on any of their lines, never mind 500-700%.

Just coming back to your point.

Let's say, hypothetically, that the production run looks like this:

10,000 units - costs $10.00 / unit after all design, advertising, tooling, etc. (this varies figure to figure, as a figure like Faker, for example, had no newly tooled parts).

That would cost $100,000.

Each figure is sold for $22.00... let's say that all but 1,000 figures (held back for customer service stock) are sold. That equals: $198,000 brought in from sales.

$198,000
$100,000-
------------
$98,000 profit.

Now let's sell 500 of those 1000 held back figures at a discount on Mad Matty for $19.80 each... That's another $9,900...

That's $107,900 total.

I know this is INCREDIBLY simplistic... I am not accounting for a lot of variables...

But let's say the figures cost a whole heck of a lot less per unit to produce...

Let's say they cost $5 / unit.

That would mean an even greater amount made.

Now, I know Mattel pays taxes... but then, most huge corporations DON'T because of loopholes...

Let's say they make 20,000 figures per batch... that increases the profit too..

So, yes, 600% profit is an exaggeration... but saying that they make a tiny profit is insane. They MUST make a good profit.

[vertigoink]

Just coming back to your point.

Let's say, hypothetically, that the production run looks like this:

10,000 units - costs $10.00 / unit after all design, advertising, tooling, etc. (this varies figure to figure, as a figure like Faker, for example, had no newly tooled parts).

That would cost $100,000.

Each figure is sold for $22.00... let's say that all but 1,000 figures (held back for customer service stock) are sold. That equals: $198,000 brought in from sales.

$198,000
$100,000-
------------
$98,000 profit.

Now let's sell 500 of those 1000 held back figures at a discount on Mad Matty for $19.80 each... That's another $9,900...

That's $107,900 total.

I know this is INCREDIBLY simplistic... I am not accounting for a lot of variables...

But let's say the figures cost a whole heck of a lot less per unit to produce...

Let's say they cost $5 / unit.

That would mean an even greater amount made.

Now, I know Mattel pays taxes... but then, most huge corporations DON'T because of loopholes...

Let's say they make 20,000 figures per batch... that increases the profit too..

So, yes, 600% profit is an exaggeration... but saying that they make a tiny profit is insane. They MUST make a good profit.

Back when I did the brief freelance work with Toyfare Brian and worked on the copy design for the MOTUC ads there was speculation at the office even back then where we guessed from hearing things that the run was between 15-20k but given reduced production numbers now I'd say the guess you made is probably very very close. Technically I was never supposed to open my mouth about it but recently when i did some design freelance in packaging for Hasbro I know the overall profit margin is about 18%- so, Hasbro's profit margin on action figures probably at least starts at 18% but maybe runs as high as 25-35%. Either way if you apply a similar formula to MOTUC given same tooling cost for the original molds being similar regardless of 3 3/4 vs. 7 inch (the price of a sports car) according to Scott, I'm guessing that the individual cost per unit for Mattel would be $5.77 or round it to $6 and for some with a bigger deco and accessory count perhaps $7 so go from there to calculate the overall profit given a run of 10-15 k per figure. (the profit margin obviously varying between the more re-used parts vs. the newer use parts and more deco and accessory pack outs).

Also similar to Hasbro, you can gather some insight by looking at their 10k forms.

[JonWes]

Other costs to consider: labor wages for factory workers, shipping, product testing, package testing, packaging, salaries for Mattel employees, and so on.

Now, that being said—and I don't know what numbers Mattel is working with, obviously—but my guess is that it's probably likelier that the per unit cost for Mattel is closer to $5 than $10. If it's not, then Mattel is making far less than a lot of companies REQUIRE to be considered profitable enough to be worth the effort. I know that's part of your point...that companies shouldn't do that. But if that's the case, then your problem might be more with capitalism in general, and not Mattel in particular... but I'll leave that particular subject alone because it's more Tar Swamp material.

The other day I bought an $80 power cord for my laptop from Apple. How much do you think it costs to create a cord with a little power box on it? Now THAT'S an obscene mark-up. Or, how about your typical cup of pop at a fast food place. It costs about 5-10 cents for them. You likely pay 10-15X that amount depending on what size you get. That's why you get free refills.

One thing to consider though, when thinking of companies and profits and all that. Sometimes the crazy profit margins are PARTLY there so that there is some buffer for other projects. Mattel in particular has had some spectacular failures with the boy's action category in recent years. Both Secret Saturdays and Generator Rex flopped after they had already pushed a lot of product out. That's probably why it's been such a chore to get Voltron Force toys and we still have no solid info on when those are coming out. So, sometimes a little of the thinking behind "maximizing profits" with one successful line is to help protect against the damage that could be done by riskier ventures.

Now, all this being said, it doesn't really make a difference for the end consumer, does it? All of us could understand the realities of production and understand the costs completely... and if it's too much, it's too much.

[bcrduke]

Back when I did the brief freelance work with Toyfare Brian and worked on the copy design for the MOTUC ads there was speculation at the office even back then where we guessed from hearing things that the run was between 15-20k but given reduced production numbers now I'd say the guess you made is probably very very close. Technically I was never supposed to open my mouth about it but recently when i did some design freelance in packaging for Hasbro I know the overall profit margin is about 18%- so, Hasbro's profit margin on action figures probably at least starts at 18% but maybe runs as high as 25-35%. Either way if you apply a similar formula to MOTUC given same tooling cost for the original molds being similar regardless of 3 3/4 vs. 7 inch (the price of a sports car) according to Scott, I'm guessing that the individual cost per unit for Mattel would be $5.77 or round it to $6 and for some with a bigger deco and accessory count perhaps $7 so go from there to calculate the overall profit given a run of 10-15 k per figure. (the profit margin obviously varying between the more re-used parts vs. the newer use parts and more deco and accessory pack outs).

Also similar to Hasbro, you can gather some insight by looking at their 10k forms.

Thank you for the insight! I don't think it's "shady" for any of us to wonder about, or question how much of a profit Mattel, or any other company, makes on products we buy.

Talking about this, supposing, etc., is only going to generate enough discussion for us to make an educated guess about what we are dealing with as far as what's a fair price, etc.

Other costs to consider: labor wages for factory workers, shipping, product testing, package testing, packaging, salaries for Mattel employees, and so on.

I'm guessing a lot of those things are done by salaried employees within Mattel?

Now, that being said—and I don't know what numbers Mattel is working with, obviously—but my guess is that it's probably likelier that the per unit cost for Mattel is closer to $5 than $10. If it's not, then Mattel is making far less than a lot of companies REQUIRE to be considered profitable enough to be worth the effort. I know that's part of your point...that companies shouldn't do that. But if that's the case, then your problem might be more with capitalism in general, and not Mattel in particular... but I'll leave that particular subject alone because it's more Tar Swamp material.

I only have a problem with capitalism if the product's quality suffers, because I feel like, long-term, that does irreparable damage to a company. Part of the reason Mattel is such a success is because for decades, its toys were of exceptionally high quality.

The other day I bought an $80 power cord for my laptop from Apple. How much do you think it costs to create a cord with a little power box on it? Now THAT'S an obscene mark-up. Or, how about your typical cup of pop at a fast food place. It costs about 5-10 cents for them. You likely pay 10-15X that amount depending on what size you get. That's why you get free refills.

Apple is ridiculous LOL. The soda thing is a good example of what you're talking about here:

One thing to consider though, when thinking of companies and profits and all that. Sometimes the crazy profit margins are PARTLY there so that there is some buffer for other projects. Mattel in particular has had some spectacular failures with the boy's action category in recent years. Both Secret Saturdays and Generator Rex flopped after they had already pushed a lot of product out. That's probably why it's been such a chore to get Voltron Force toys and we still have no solid info on when those are coming out. So, sometimes a little of the thinking behind "maximizing profits" with one successful line is to help protect against the damage that could be done by riskier ventures.

The soda is the buffer. Perhaps He-Man and She-Ra are too

My main point is that as a loyal customer, I want quality to remain up to Mattel's classic standards. I don't want to be ripped off either. If it means that for a little while, Mattel has to eat a $1 in profit/unit, that might be a better investment, long-term, for them than raising prices and lowering quality to a point where this drives buyers away.

I think the next two years looks good for this line though... on a happier note...

[vertigoink]

Those prices are all after manual labor and everything though Jon the profit is factored in AFTER all the things like tooling cost, labor, production, design, etc. now I'm only speculating based on what I know as FACT on Hasbro's part but I assume Mattel would be extremely similar except doubling the cost since a typical joe costs about $2.75-$3.00 to produce in raw materials and then you double the scale for MOTUC and yeah.

Thank you for the insight! I don't think it's "shady" for any of us to wonder about, or question how much of a profit Mattel, or any other company, makes on products we buy.

Talking about this, supposing, etc., is only going to generate enough discussion for us to make an educated guess about what we are dealing with as far as what's a fair price, etc.



I'm guessing a lot of those things are done by salaried employees within Mattel?



I only have a problem with capitalism if the product's quality suffers, because I feel like, long-term, that does irreparable damage to a company. Part of the reason Mattel is such a success is because for decades, its toys were of exceptionally high quality.



Apple is ridiculous LOL. The soda thing is a good example of what you're talking about here:



The soda is the buffer. Perhaps He-Man and She-Ra are too

My main point is that as a loyal customer, I want quality to remain up to Mattel's classic standards. I don't want to be ripped off either. If it means that for a little while, Mattel has to eat a $1 in profit/unit, that might be a better investment, long-term, for them than raising prices and lowering quality to a point where this drives buyers away.

I think the next two years looks good for this line though... on a happier note...

Yeah I even admit as a devoted Apple buyer that they are some of the biggest scam artists in the world lol but they make purdyyy chizz and I get discounts being a designer so it helps lol.

[Replikor]

Well I personally hope they go to for this idea to do 12 monthly figures an 4 beasts/lagefigures for the year [not counting exclusive reveal items].

[Dr Kain]

And 3. If you dont have a job why worry bout toys?

I already stated I was already signed up when I was told I had to quit.

I was not expecting to not have a job this far into the year though. I figured I would at least be working part time by now. Okay, that is not completely true. I have done a few temp assignments for a temp agency, so I have had some small paychecks, but not much.

[ksensor]

...
We did move a few 2013 figures around (for the first time) to ensure the Q1 figures are very strong to show fans how much life the line still has! When we aquired the Filmation rights it meant a reworked of all future line ups, so we used this opportunity to ensure the Q1 figures each year were very strong to help sell in the subs.
...

I'm really happy to hear this. I was amazed to read in an earlier Q&A that when they started the subscription system, they didn't shuffle the yearly line-up to stack the first quarter. If you're trying to sell subs, it make sense to ensure the handful of figures you announce are ones that will help sell subs.

I thought announcing the $60 3-pack prior to the 2012 sub going on sale was a big mistake. Not because it was POP, but because a $60 item right at the start was a big commitment to ask for from subscribers. I think more subs would've been sold if the line-up had included the $40 Snake-Men two-pack instead of the 3-pack. They could've still included the Star Sisters, but just released them later in the year.

I'm glad to hear they've started to re-arrange the release schedule to showcase figures that will help sell more subs.

[WDWFreak53]

Just coming back to your point.

Let's say, hypothetically, that the production run looks like this:

10,000 units - costs $10.00 / unit after all design, advertising, tooling, etc. (this varies figure to figure, as a figure like Faker, for example, had no newly tooled parts).

That would cost $100,000.

Each figure is sold for $22.00... let's say that all but 1,000 figures (held back for customer service stock) are sold. That equals: $198,000 brought in from sales.

$198,000
$100,000-
------------
$98,000 profit.

Now let's sell 500 of those 1000 held back figures at a discount on Mad Matty for $19.80 each... That's another $9,900...

That's $107,900 total.

I know this is INCREDIBLY simplistic... I am not accounting for a lot of variables...

But let's say the figures cost a whole heck of a lot less per unit to produce...

Let's say they cost $5 / unit.

That would mean an even greater amount made.

Now, I know Mattel pays taxes... but then, most huge corporations DON'T because of loopholes...

Let's say they make 20,000 figures per batch... that increases the profit too..

So, yes, 600% profit is an exaggeration... but saying that they make a tiny profit is insane. They MUST make a good profit.

Yes, it's simplistic but you're missing a key component to that figure.
It may cost only $10/figure to make...but you gotta remember that each one of these needs to be sculpted...and you have the 4Horsemen who, I'm sure, aren't working for minimum wage.

[Squishy Duck Man]

Yes, it's simplistic but you're missing a key component to that figure.
It may cost only $10/figure to make...but you gotta remember that each one of these needs to be sculpted...and you have the 4Horsemen who, I'm sure, aren't working for minimum wage.

What about packaging? Not just cost of materials but labour to insert the figures & accessories into the package and the individualized white mailer boxes? Or is that considered part of the "unit after all design"?

[shadowfall1976]

Yes, it's simplistic but you're missing a key component to that figure.
It may cost only $10/figure to make...but you gotta remember that each one of these needs to be sculpted...and you have the 4Horsemen who, I'm sure, aren't working for minimum wage.

So then with that logic, they make nothing in profits, because if you take that $10, that leaves $12 each then that for payment to the 4H, the workers, and paying DR a bit of each for their sire part of it, and the packaging....then there is what $2 - $3 profit per figure.....no, it's more like all of that is part of the $5 - $10 per figure....if Mattel wasn't making more than half in profit from each figure, they would have killed the line a long time ago for something that would net them what they want.

It is safe to assume that Mattel is making at least half of the figures retail in profit, if not, that would not be good business sense, and they haven't been around all this time not to be killing on profits.

[Super He-Man]

Do you honestly think Mattel is producing this line out of the kindness of its "heart?"

Do you NOT think they are making a sick profit?

That's how business works.

And clearly Scott's comment wasn't an indication that he believed the line is making precisely "five times" what they are spending. Do you really think I took that literally? He's supposed to promote the idea that the line is healthy.

And I'd say Barbie makes a KILLING... especially considering how much part re-use there is.

As for your "Know it All" comment: your explanation of how you're laying into others for using my numbers (which I'd clarified as being totally made up for the sake of illustrating a point), sounded really snarky. Again, if you want to believe that Mattel isn't making a TON of profit on these figures, that's your right. I can't go along with that.

Call me a Know-It-All... I really don't care. I removed my "obvious" comment, though it really wasn't supposed to be harshly mean.

So then with that logic, they make nothing in profits, because if you take that $10, that leaves $12 each then that for payment to the 4H, the workers, and paying DR a bit of each for their sire part of it, and the packaging....then there is what $2 - $3 profit per figure.....no, it's more like all of that is part of the $5 - $10 per figure....if Mattel wasn't making more than half in profit from each figure, they would have killed the line a long time ago for something that would net them what they want.

It is safe to assume that Mattel is making at least half of the figures retail in profit, if not, that would not be good business sense, and they haven't been around all this time not to be killing on profits.

I wasn't trying to be harshy or snarky, just realistic.

I don't think their doing anything out of the goodness of their heart. I guess we just have different definitions of what constitutes a "sick" profit. If I made an item for $200 and sold it for $300, I'd be very happy with my 50% profit. Or, if I made 100% like in shadowfall's example, I'd be thrilled. I just don't see the evidence that a tiny line like MOTUC, with a very small production run compared to retail, only costs an average of $5 or less to make. If you mass produced them like Barbie, maybe, but not when you're making, as has been speculated, 10-20,000.