LUND and COMPANY INVENTION, L.L.C.

The Golden Age of Toys, Part 2

These studios were the 'light' of the toy business, beacons of imagination, creativity, innovation, humor, delight, joy and wonder. Today, innovation and invention may be said to no longer dominate, but licensing is king. The use of entertainment properties, super heroes, space tales, dinosaurs, princesses, all owned by Disney, and a few others, is what drives toy sales.

These licensed characters and story likenesses command royalties so high, nearing 25% of the wholesale price, that innovative, inventive, novel play features are being squeezed out of toys. They cannot afford to incorporate into the products that bear those exorbitant licensed property royalties.
 I see those 'beacons' dimming. The light is fading, perhaps in danger of going out...

To be continued...

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The Golden Age of Toys, Part 1

The modern toy business grew up after WWII with the dawn of plastic as the new medium for consumer products. Along with arose the 'community' (as it is commonly called) of toy inventors that provided an ever-fresh abundance of innovative concepts that the newly affluent middle class desired, having seen them on the nascent medium of TV advertising.

Marvin Glass was the first, best and biggest, creating most of those iconic toys and games of the 60's, 70's and 80's. Mousetrap, Operation, Rock'em Sock'em Robots, Chatty Cathy, Mr. Machine and countless others of those eras came out of his studio, and others that followed contributed to that torrent of fresh new and novel products. The Golden Age of Toys perhaps.

To be continued...

 

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Are toy price points too low? Part 4

What if the consumer is not aware of these hard-and-fast price points? What if the consumer is willing to pay for value, play features and innovation, magic, wonder and delight? I have seen the price of action figures rise dramatically, and still sell spectacularly.

I believe price points can be raised, need to be raised, on certain product categories if product quality and value, real and perceived, are commensurate to support a higher price. I believe that this is in the interests of all, consumers first and foremost, and all of the supply chain that bring the products to the market.

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Are toy price points too low? Part 3

I suggest that this trend will result in less toys, less innovative play features, less magic and wonder, less durability and less value to the consumer. I suggest that this may be to the detriment of all stakeholders, from licensors, to retailers, to toy companies, right down to the consumer.

And what if they are wrong? What if buyers are wrong about the inelasticity of toy price points and what the consumer is willing to pay? If higher prices reduce unit sales, they may still result in greater profits for all.

To be continued...

Photo credit: alles banane / Foter / CC BY-NC-ND

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Are toy price points too low? Part 2

Certain types of products have been traditionally sold at specific price points, and the buyers, whose word is as if a pronouncement from Heaven above, allow no deviation. And yet these buyers are really just babies in the industry, ‘buyers in training,’ starting their career in toys, and later moving to more ‘important’ categories. They are relying on history and what they are told, and not necessarily on the realities of the marketplace as they might one day come to understand them. Maybe what they have been told is wrong. 

To maintain price points, something has to give. We have been told that 90% of the toy factories in China have gone out of business in the last 10 years, as they cannot survive on toy margins. Products will have to be make more cheaply, less product can go into the box, and more ‘air’ will go in.

I remember long ago the adage: “Nothing is cheaper than plastic.” This is not to say that plastic is cheap, but rather putting more of ’nothing’ in the package is much cheaper than putting in plastic. Innovation from inside and independent inventors will have to be left on the ‘cutting room floor.’ Something has to give to continue to sell the same product at the same retail price with costs having risen, and continuing to rise as they have been.

To be continued...

 

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Are toy price points too low? Part 1

This was an intriguing question posed recently after my talk to the British Toy and Hobby Association on “Why Toys Matter, and What are We to Do about It?” It was asked by an industry colleague and friend; let’s just call him Mr. Brown. Later over lunch, the question came up again.

As cost of toys goes up in China for a plethora of reasons, and royalties charged for use of entertainment properties such as Marvel, Star Wars, Jurassic World, and etc. approach 25%, retail price points at which toys sell have remained the same, $9.99, $14.99, $19.99, $24.99, and so on. And just make those same prices denominated in Pounds Sterling for the UK market which is nearly twice as expensive as in the US, but that is a topic for another day.

To be continued...

Certain types of products have been traditionally sold at specific price points, and the buyers, whose word is as if a pronouncement from Heaven above, allow no deviation. And yet these buyers are really just babies in the industry, ‘buyers in training,’ starting their career in toys, and later moving to more ‘important’ categories. They are relying on history and what they are told, and not necessarily on the realities of the marketplace as they might one day come to understand them. Maybe what they have been told is wrong. 

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