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05-21-2017, 07:15 AM | #1 |
Cobra Lab Rat
Join Date: Sep 2013
Location: California
Posts: 2,999
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A while back I made this massive post about Hasbro's awful case ratios. Yeah, if you read through it I go through quite a few of Hasbro's more obvious and bizarre mistakes.
http://www.hisstank.com/forum/toys/4...-problems.html ------------- Well I pull up jedi temple archives today and I pull out ANOTHER article about another E-tailer complaining about the same points I brought up. Overall it's a nice read and again, brings up some interesting questions. Jedi Temple Archives News: A Plea From An Online Retailer To Save The Star Wars Collecting Hobby --------------- ------------------ ------------------------- Below goes more in depth on some things the E-tailer brought up. It's more detailed explanation on various concepts a toy company SHOULD know, but Hasbro doesn't seem to know. A method to prevent pegwarming and figure bottlenecks. -------------------------------- ------------------------ ------------------ *edited 5/29/17 because it wasn't very clear. Currently, pegwarming figures is a big problem in mass-market retail action figure sales in particular because it is one of the greatest weaknesses in selling toys in waves of cases. Each figure in a Toy case will always sell differently, because each is demanded differently, and selling Toys in cases means the price is set, yet demand for each figure is not, hence peg warming occurs. Currently, Hasbro's sales figures only include sales figures of the whole case of figures, not the individual figures themselves, so when Hasbro attempts to construct cases of figures, it's doing so partially blind which is inefficient. Hasbro also only receives this data after the problem has occurred and months later, so it's reaction time is slowed. . . . . .So why not have ONLINE PRE-ORDERS of INDIVIDUAL FIGURES. Hasbro could adjust manufacturing to essentially meet demand exactly, while only risking pre-order cancellations, which should eventually stabilize and be negligible. Because the bulk of those pre-orders would be from E-tailers, who actually rarely renege on pre-orders intentionally. Individual figure pre-orders were one of the responses I proposed before to help alleviate pegwarming in mainstream mass-market. An individual figure pre-order before manufacturing would allow Hasbro to not only get a better picture of the sales data for individual figures in toy cases and give data on the demand of each figure, it would also occur earlier, which would increase flexibility in response time and allow various types of responses and allow for the construction of better future Toy Cases, much like what Lego and many other Toy companies do to increase reaction time. The pre-orders would also give Hasbro some hard sales data months ahead of the current system of sold Toy Case data returning months later after the product had shipped. This would allow Hasbro to craft a response ahead of time and foresee future bottlenecks and pegwarming problems and immediately begin measures to mitigate them. If Hasbro applied these individual figure pre-orders before manufacturing in other words, Hasbro would be able to predict which figures would peg warm and which will sell better with more accuracy and supply the appropriate amounts which will allow Hasbro to sell closer to the amount of figures people actually want. ----------------- E-tailer, vender and physical retail participation. Venders will be the ones making the pre-orders to Hasbro, but keep in mind that the venders bear the brunt of the risk of unsold inventory, so Hasbro can expect the venders/ e-tailers to use prudent judgement and use their expertise to try to pre-order to their own maximum benefit or go out of business and leave the market. Usually venders/ e-tailers themselves open pre-orders to seal sales of their own pre-orders. Given that Hasbro can open new pre-orders later, have special pre-orders called backorders later on and modify future Toy case waves and release more in the future in one form or another, the individual figure pre-orders sales should probably be ratio pegged to each other to prevent overselling one figure. Meaning the top seller should be made to not be able to out sell the lowest seller by 12 times or some other large determined ratio etc to prevent possibly huge loses or vender hoarding. If it does reach that ratio, it's probably an extreme case of supply and demand see below. * If there is a massive supply and demand imbalance in the line of 12 figures of Joes sold for 1 Batman sold, I believe the pre-orders before manufacturing I propose would observe this imbalance, then Hasbro/ Toy company could respond to the situation with special responses, namely multi packs, blind packaging, tailored cases and special pre-orders called back orders. ** If the demand for a figure is wayyyy too high, or wayy too low, Hasbro can offer them separately as exclusives in appropriate amounts or multipacsk to maximize profits and prevent them from interfering with the Toy case itself, but that would of course be a last resort option. I expect some pre-order shenanigans to still occur, but these should be happening before the manufacturing phase, which would allow Hasbro or a toy company to react to demand, such as increase or decrease planned production of individual figures, plan a response Toy Case Wave for foreseen surges and nosedive of demand, etc. This is in other words, the place where Hasbro should find out what will work and what won't BEFORE committing their massive resources. >I want to add that without an individual figure pre-order system, Hasbro can't really tailor new Cases of figures because they're not getting data on the demand of individual figures, which is PRECISELY the problem, in addition to the second awful problem, the case system. -A case of figures always guarantees a lot of no sales because demand for each individual figure will always differ, which encourages over and under supply trends in the market AND THE aftermarket, which then feeds back into the market. >To tackle this problem, Hasbro can blind bag and package the figures to prevent peg warming because you can't pick what you can't see or feel, which helps but can be abused by assigning figures rarities like "ULTRA RARE" and "common". - A bad solution is to enforce a one popular figure per person or purchase policy that's common in Asia because believe me, the customers will either simply bring multiple family members or repeatedly return when employee shifts change. - The best solution though is to tackle the SUPPLY imbalance before the toy cases hit retail. Which means making the highly desirable toys BEFORE they become desirable. How does Hasbro know which are desirable beforehand? ---------------------------- --------------- On a side note, given all the demerits a case system has, why does Hasbro stick with it? Well........ 1. It makes selling Toy cases easier to retailers. *edited 5/22/17 to explain better. -Retailers don't like setting different price points for products if they don't have to as they're human beings, they're lazy. So if you sell a case of figures and then have a set price called MSRP, they can just input ONE PRICE for all those different figures, regardless of how vastly different their costs are. This is the MAIN CRUX of convenience for what retailers want, even though this is PRECISELY why peg warming even exists. 2. A case of mixed toys that doesn't sell well with anyone also is highly unlikely to completely BOMB if constructed correctly. -Reduces risk. Sort of, more variety. 3. Putting a rare of high quality figure amongst the rest increases demand for the Case of figures itself. (A short term advantage obviously as it causes massive pegwarming) -One per case syndrome. But the absolute most important reason is . . . . . 4. It allows Hasbro's accounting department to average the costs of higher and lower costing figures into an easy expenditure number to put on the balance sheet that can be regulated. Hasbro can then increase or decrease the quality accordingly to meet the expenditure budget and even cancel product to meet the Expenditure target to please share holders. *edit 5/20/17: Multipacks operate in a similar fashion. Ho yes, that's the real reason. O-Ring joes essentially were ALL repaints and used similar parts. Modern figures costs vary per figure, so if the company allowed individual pre-orders of figures, it could run into massive orders of unprofitable figures. Of course this logic is awful but it's made to serve share holders short term, not the Long Term growth of Hasbro. --------------- *added in after talking to coworkers 5/22/17 > Individual figure Pre-orders when the price is set at one price. *(By the way, I disagree with a set one price fits all situation but we're assuming price is set because big box retailers are lazy) If the price is set at a certain price regardless of how much it can actually sell or costs, does this mean Individual pre-orders are impossible due to costing etc? Because this means that one figure can cost more to make and actually lose money or demand will always outstrip the price of certain figures right? Not really. First off, cost and the possible sell price are Hasbro's domain. If the set MSRP is such a problem, just change it so it's NOT A SET MSRP. At the very least make it not a set MSRP during pre-orders!! You could even automate the price by % of left over stock. It's NOT SUCH A problem and you can still get good data from it. Also, if you sell out of pre-orders, THE PRE-ORDERS DID THEIR JOB, you had better do secondary work to figure out exactly HOW MUCH is actually demanded and react accordingly to future cases, releases etc. Overall these solutions maximize everyone's profits and happiness. And they work, companies who do these things slowly devour the ones that don't. ------------------ Well, There are dark sides to pre-orders too. If a product sells too well, Target or Walmart or a retailer might demand the figure be made into an exclusive, which as we all know is a TERRIBLE idea and anti-customer. If a product sells too fast, exactly what does that tell Hasbro? Not much. Also, an automated pricing system sounds a lot like profiteering, which can be abusive if done wrong. -Okay, those are actually good points. I will go over them and hopefully convince you a little. --I hope this post gives you a littler more perspective on how I and my colleagues perceive Hasbro's business decisions. The actual concepts we use involve various concepts like Days Sales Oustanding, Opportunity Cost, Macro and Micro economic theory interactions and various applications of Game Theory loosely. -Remember though, pre-ordering was essentially invented by 3.75 figures Star Wars figures and is widely used in foreign toy Markets. If it's completely infeasible, it should be infeasible to them due to their costs being higher than ours. ------------------------------------- ------------------------ *added in 5/29/17 Info from another post just in case so this stuff is in first post. Toy cases increase foot traffic for people looking for figures? Well, peg warming is essentially an end result of the Toy case system, where the price is set but demand for each figure differs depending on region, popularity etc. Hasbro needs product that's more liquid and sells better and faster if foot traffic was the objective. Pegwarming essentially negates the advantage of increased foot traffic a Toy Case good give because to get consistent foot traffic to a big box chain you need consistent sales, and Toy Cases are DESIGNED to not sell consistently all at once. A pre-order or Blind packaging system would mitigate this through aftermarket manipulation and preventing Toy picking behavior to move product. Unsold product is much more damaging than juggling manufacturing and shipping costs. The current system is easier for Hasbro, but simply put, no Pre-orders means the Toy Cases they are constructing are of inferior quality and are resulting in unsold product due to over and underselling individual figures within the Case. They're not studying how well each individual figure is selling by itself. And essentially, pre-orders tell the company EXACTLY how much demand is required of each figure, and Pre-orders are supposed to happen BEFORE manufacturing so the company Shouldn't have to juggle company and manufacturing orders in the first place. Also, adjusting to demand and manufacturing products is how the Market works, it's logistics and Inventory work I'm VERY FAMILIAR with so Hasbro SHOULD already be doing that like pretty much every company I've worked with like Lego, who by the way are rumored to know the inventory numbers down to the INDIVIDUAL STORES. I'm not so sure why Hasbro doesn't. -Here's a Gander on a PDF paper you can find on the Subject of Lego's recovery. It focuses on Brand recognition, Lego opening it's own stores and financial innovation, etc, but pay attention to the massive emphasis on Logistics and focus on Retail and inventory for Lego's recovery and prominence. http://www.thelegocasestudy.com/uplo...study_2014.pdf ---------------------- There's no excuse why Hasbro doesn't have their own set of stores like Lego. They would be able to directly receive data on their sales. That's actually a great idea parallel to Lego and similar to Bandai and various foreign stores running their own private stores to receive deand and supply data. They don't even have to run so many, just about 50 to gather data throughout the country in cities would be very effective. --The entire aftermarket, ebay, amazon etc, is online and regularly bleeds into the mainstream Big Box and retail chain market, as E-tailers and Online trades between individual customers determines price and demand and how Peg Warming begins and ends through interactions of feedback loops. -Financially unfeasible? Well, if it's the manufacturing side, again Pre-orders should come in before manufacturing, that should not affect costs. If it comes in during manufacturing, yeah that would be true. -Logistics and inventory management is a cost HASBRO should already being paying. Constructing new Toy cases and responding to demand maximizes profit so if they're not paying someone to do this already, well, then they're not doing their job right. Also unsold merchandise bleeds costs into Hasbro's profits anyways, if they paid more money responding to demand, they would have less unsold product to begin with. -I'm not expecting immediate responses in inventory, even with the Proposed solutions in the first post that Hasbro could do, it would take them a Month at Max to respond and about two more months to reach retail through distribution, but remember that the pre-orders were to take place before manufacturing, which means they should be planning a response IMMEDIATELY to cut down on response times unlike now when it happens in reaction to poor sales. Last edited by Snakeeyesisposh; 05-29-2017 at 05:47 AM.. |
05-21-2017, 08:41 AM | #2 |
Cobra Viper
Join Date: Jun 2010
Location: Leeds, UK
Posts: 237
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Got it in one.
Also Hasbro doesn't get the individual order data, only the case data so Hasbro won't have any idea what's popular until the retailers start screaming at them for more of X figure by which time it's far too late as the case assortments are already set and in production.
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05-22-2017, 10:00 AM | #3 |
Crimson Guard
Join Date: Dec 2007
Location: Pennsylvania
Posts: 1,288
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I agree 100% pre-order is the way to go, even if they continue to sell cases to retail. Nothing is stopping them from doing both, it is a modern era, a computer age. Hasbro is really far behind in this area.
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05-23-2017, 01:06 AM | #4 |
Cobra Lab Rat
Join Date: Sep 2013
Location: California
Posts: 2,999
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Quote:
Got it in one.
Also Hasbro doesn't get the individual order data, only the case data so Hasbro won't have any idea what's popular until the retailers start screaming at them for more of X figure by which time it's far too late as the case assortments are already set and in production. How do you fix a build up of cases of figures after it's occurred? Even worse, how do you use case data to identify problematic individual figures? It becomes a bloody mess of pegwarming, aftermarket feedback loops and retailers ordering cutbacks and wave delays if you try to solve the problem after it's occurred. |
05-25-2017, 05:27 PM | #5 |
Cobra Lab Rat
Join Date: Sep 2013
Location: California
Posts: 2,999
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I'm sorry you don't understand. Should I simplify it for you?
-------------------- -Here you go. Jedi Temple Archives News: 40th Anniversary Case Assortment Makes This Etailer Voice Opinions Jedi Temple Archives News: A Plea From An Online Retailer To Save The Star Wars Collecting Hobby -E-tailers are complaining. Online retailers are complaining. It's not about me buying, it's about these guys who sell to you customers who are hurting. The huge first post is a Text paper I wrote that details the weaknesses of Hasbro's Toy Case system and proposed solutions that have been known for years. |
05-25-2017, 06:47 PM | #6 |
Cobra Viper
Join Date: Apr 2007
Location: Somwhere
Posts: 254
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So if I am reading that huge block of text correctly you want Hasbro to take preorders on all of it's figures then manufacture on a per preorder basis? Then tailor future retail cases based on what presold the most?
That sounds like a great idea for e-tailers and a piss poor idea for us the consumer. Do you understand the reasoning behind one per case figures? Were you aware that Wal-Mart especially loves those because they drive increased foot traffic for people looking for figures? Its a pain in the ass but not as much as Wal-Mart ordering less cases would be. This is aside from the overhaul and expense of revamping how the factories do things. Right now Hasbro says give me 100K of this and 100K of that and package them in this ratio. You are expecting them to continuously adjust and rejigger case pack outs based on sales? Are you willing to hand pack the cases for free to make sure they're individually packed right and shipped right? Because if you don't then Hasbro has to pay a group to do that. What you want is a store. Where they order full cases and then you can pick the ones you want. I can't see Hasbro ever doing that. Your ideas are financially infeasible and frankly the logistics make it impractical. It would make life easier on the e-tailers yes. From their prospective I see many benefits. What do Hasbro and I (The consumer) get out of it? |
05-25-2017, 08:59 PM | #7 |
Cobra Lab Rat
Join Date: Sep 2013
Location: California
Posts: 2,999
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-Okay, those are actually good points. I will go over them and hopefully convince you a little.
--I hope this post gives you a littler more perspective on how I and my colleagues perceive Hasbro's business decisions. The actual concepts we use involve various concepts like Days Sales Oustanding, Opportunity Cost, Macro and Micro economic theory interactions and various applications of Game Theory loosely. -Remember though, pre-ordering was essentially invented by 3.75 figures Star Wars figures and is widely used in foreign toy Markets. If it's completely infeasible, it should be infeasible to them due to their costs being higher than ours. ------------------------------------- ------------------------ Quote:
That sounds like a great idea for e-tailers and a piss poor idea for us the consumer. Do you understand the reasoning behind one per case figures? Were you aware that Wal-Mart especially loves those because they drive increased foot traffic for people looking for figures? Its a pain in the ass but not as much as Wal-Mart ordering less cases would be.
Pegwarming essentially negates the advantage of increased foot traffic a Toy Case good give because to get consistent foot traffic to a big box chain you need consistent sales, and Toy Cases are DESIGNED to not sell consistently all at once. A pre-order or Blind packaging system would mitigate this through aftermarket manipulation and preventing Toy picking behavior to move product. Quote:
This is aside from the overhaul and expense of revamping how the factories do things. Right now Hasbro says give me 100K of this and 100K of that and package them in this ratio. You are expecting them to continuously adjust and rejigger case pack outs based on sales? Are you willing to hand pack the cases for free to make sure they're individually packed right and shipped right? Because if you don't then Hasbro has to pay a group to do that.
They're not studying how well each individual figure is selling by itself. And essentially, pre-orders tell the company EXACTLY how much demand is required of each figure, and Pre-orders are supposed to happen BEFORE manufacturing so the company Shouldn't have to juggle company and manufacturing orders in the first place. Also, adjusting to demand and manufacturing products is how the Market works, it's logistics and Inventory work I'm VERY FAMILIAR with so Hasbro SHOULD already be doing that like pretty much every company I've worked with like Lego, who by the way are rumored to know the inventory numbers down to the INDIVIDUAL STORES. I'm not so sure why Hasbro doesn't. -Here's a Gander on a PDF paper you can find on the Subject of Lego's recovery. It focuses on Brand recognition, Lego opening it's own stores and financial innovation, etc, but pay attention to the massive emphasis on Logistics and focus on Retail and inventory for Lego's recovery and prominence. http://www.thelegocasestudy.com/uplo...study_2014.pdf Quote:
What you want is a store. Where they order full cases and then you can pick the ones you want. I can't see Hasbro ever doing that. Your ideas are financially infeasible and frankly the logistics make it impractical. It would make life easier on the e-tailers yes. From their prospective I see many benefits. What do Hasbro and I (The consumer) get out of it?
Yes, like the Lego store. There's no excuse why Hasbro doesn't have their own set of stores like Lego. They would be able to directly receive data on their sales. That's actually a great idea parallel to Lego and similar to Bandai and various foreign stores running their own private stores to receive deand and supply data. They don't even have to run so many, just about 50 to gather data throughout the country in cities would be very effective. --Also, making life easier for e-tailers is besides the point, the entire Ebay, Amazon market is online and regularly bleeds into the mainstream Big Box and retail chain market, as E-tailers and Online trades between individual customers determines price and demand and how Peg Warming begins and ends through interactions of feedback loops. -Financially unfeasible? Well, if it's the manufacturing side, again Pre-orders should come in before manufacturing, that should not affect costs. -Logistics and inventory management is a cost HASBRO should already being paying. Constructing new Toy cases and responding to demand maximizes profit so if they're not paying someone to do this already, well, then they're not doing their job right. Also unsold merchandise bleeds costs into Hasbro's profits anyways, if they paid more money responding to demand, they would have less unsold product to begin with. -Also, I'm not expecting immediate responses in inventory, even with the Proposed solutions in the first post that Hasbro could do, it would take them a Month at Max to respond and about two more months to reach retail through distribution, but remember that the pre-orders were to take place before manufacturing, which means they should be planning a response IMMEDIATELY to cut down on response times unlike now when it happens in reaction to poor sales. |
05-26-2017, 12:42 AM | #8 |
Crimson Guard
Join Date: Feb 2013
Location: Orlando
Posts: 2,545
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I hope this thread reaches someone at hasbro.
Last edited by stillagijoefan; 05-26-2017 at 12:47 AM.. |
05-26-2017, 09:28 AM | #9 |
Crimson Guard
Join Date: Dec 2007
Location: Pennsylvania
Posts: 1,288
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There is no reason they cannot do both.
Preorders could help Hasbro with case packs to know ahead of time what might be popular. But even if Hasbro chooses to ignore the information they get from preorders, if big retail does not care that they have to clearance toys to get rid of them they can continue to sell cases to them. So they still get their money from them. Using the same model they have always used. |
05-26-2017, 09:44 AM | #10 |
Crimson Nerd
Join Date: Dec 2008
Location: Virginia
Posts: 12,571
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Quote:
Do tell: Which major toy manufacturers (read: Those that sell toys at mass retail in the United States) are currently operating on a 100% preorder model? The answer is "None." So you're hard pressed to justify the idea that Hasbro is "behind" when not a single one of their genuine competitors is utilizing the model you're advocating, much less doing so and making lots of money with it. On a side note: Hasbro opening their own retail outlets that they keep perfectly stocked with every figure collectors want turns them from a partner to the big-box retailers into a direct competitor. The "Collector Market" isn't remotely enough to make up for the loss in sales they would experience to the other big-box retailers ceasing to stock their product. There's a reason HasbroToyShop isn't perpetually stocked: Hasbro knows they will never close that gap, and don't want to piss off their retail buyers by selling too much product "direct to consumer." Last edited by Jmacq1; 05-26-2017 at 09:49 AM.. |
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