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12-20-2010, 03:12 PM | #1 |
Crimson Guard
Join Date: Feb 2009
Location: quad cities
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If someone at Hasbro is reading this, I'd really like to know the answer to this question, and not some mumbo jumbo QnA type answer. You have the perfect vehicle to move leftover product in Hasbrotoyshop and sell said product for a much higher profit per unit than what you make selling them to Ross or Marshalls, etc.
Alpha wave and the Target wave would have made a huge splash on HTS. You probably would have had to clearance out those glider packs at some point, but the other three would have sold well given HTS would be the only outlet to sell them. Now maybe I can understand it with the online exclusives like the cobra island packs because there might be some rule that hasbro cannot sell them on their own site and undercut the other online stores. But I just don't see the reason why black HISS tanks, target sets, alpha wave 3 sets never make it to HTS where they could be sold at original retail price but they do make it out starting at clearance prices at Ross and Walmart Canada. It just seems that someone at Hasbro is losing the company money with these business decisions. Now obviously Hasbro isn't going to come on here and say anything. But if any of you out there have any experience in retail purchasing and might be able to explain this, I'd like to hear it. |
12-20-2010, 03:18 PM | #2 |
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this is actually a very good question.
the only possible explanation is that selling it to Ross you get the entire inventory sold and get paid. selling it to HTS you technically sell it, but it is still owned by Hasbro, and you risk some not selling. and absent of the manic gotta get to the store before anyone else and I better buy them all because the next person will that drives resell value, given the ability to buy as many as you want online reduces that hysteria and people would only buy one or two of each, leaving plenty for everyone. in turn, the demand would be less as an HTS exclusive and eliminate the second hand market value that drives the hysteria and thus demand. it is better to sell them to Ross for Hasbro where they are more likely to sell out. |
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12-20-2010, 03:22 PM | #3 |
Solo Operative
Join Date: Jun 2008
Location: Memphis, TN
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The black HISS and Furys I have no idea, but if the Target Exclusives had already been sold to Target and THEY cancelled them, then it was Target who sold them to ROSS.
It's my understanding that it's the retailers, brick and online, that sell their overstock and cancelled items to the discount stores. And Hasbro has already made their money, so why by them back for a loss? Again, I have no idea how and why the black HISS and Fury's ended up at Ross. Unless an assortment had already been sold to Target before they decided not to carry Bravo vehicles.
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12-20-2010, 03:25 PM | #4 |
Crimson Guard
Join Date: Apr 2010
Location: California
Posts: 2,460
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It's probably contracts. Maybe Target had them and never put them out? I know recently Target put out a ton of HoH Storm Shadows on their site and Amazon that they failed to put up when they first came out. I paid 8 dollars for a figure that was on ebay for 15-25 a pop. Then it goes to TJ Maxx and Marshalls.
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12-20-2010, 03:27 PM | #5 |
Crimson Guard
Join Date: Feb 2009
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Quote:
this is actually a very good question.
the only possible explanation is that selling it to Ross you get the entire inventory sold and get paid. selling it to HTS you technically sell it, but it is still owned by Hasbro, and you risk some not selling. and absent of the manic gotta get to the store before anyone else and I better buy them all because the next person will that drives resell value, given the ability to buy as many as you want online reduces that hysteria and people would only buy one or two of each, leaving plenty for everyone. in turn, the demand would be less as an HTS exclusive and eliminate the second hand market value that drives the hysteria and thus demand. it is better to sell them to Ross for Hasbro where they are more likely to sell out. I can understand that argument. But then, aren't they assuming their product is going to fail? Or at the very least selling it short for its potential? I only worry about it because I worry about the health of the line in general. Too many releases relegated to discount stores means Hasbro green lights less new product, or cancels it all together. I think if the people running HTS were smart about this, they could keep a craze up. Look at how the Slaughter's were handled. Yes, there were much less of them, but they kept people on the keyboards hitting refresh for days waiting for them to come out. Now if they didn't call this an exclusive, and decided that instead of some guy in the Phillipines at a warehouse, they were the ones who pre-released this before it got to Ross, they could sell through on a third of the stock in a couple days while the other 2/3 is on its way to the Ross warehouse. Demand wouldn't be met yet, and people would be clamouring for more, and bam, then they hit Ross and you could have a successful sell through. |
12-20-2010, 03:29 PM | #6 |
Crimson Guard
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Quote:
OK, if this is the reason, it makes complete sense. Hasbro has already made their money, and the retailer is just trying to break even or minimize losses by dumping it onto someone else. |
12-20-2010, 03:31 PM | #7 |
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HTS selling these would mean = sending from China to a warehouse in the US, stocking, distributing, managing online sales, fullfillment, sorting, pulling & packaging, shipping, use tax & sales tax accrual.
Ross selling these would mean = one time / ship from asian factory / storage to end-client via coastal import / container load, paid with Net 30 (standard). This is a no-brainer. This is a big liability for Hasbro. These were Target exclusives, booked on the financials as a 1 time sale paid by the end-client, no storage / housing / marketing required. The margin is not available to sell these at HTS, which is guaranteed to have limited resources / space and under planned constraints already. If an item is going to HTS, it starts it's life with that objective, is slated for and designed to go there from the factory, or would be in such limited quantity / high dollar that the margin is available for online sale (SDCC exclusives). All retailers look at the final Landed Freight Cost (LFC) when buying and determining sales. If you ship from the factory direct to the client, you have a stronger margin. If you ship from the factory to your distribution channel, you dilute your margin and now add distribution to your profit loss margin. You lose money, even if it means selling at a higher individual unit price than what you sold to the end client discounter. This is simple, very basic good business practice. Booked as a sale to Target, after ROC stagnated and was clearanced out they cancelled the sale, which in all probability required extensive procurement negotiation to do so since Hasbro had already made the product, and prepped for shipping. Either Target stuck it to the vendor, screwing Hasbro as happens in the industry every day (and the vendor is stuck with the product on the loading docks, left w/ the bag, but nothing they can do since this isn't going to affect the relationship w/ a major market buying franchise like Target), or someone on the procurement legal side of the house at Hasbro really screwed the pooch on a bunk contract. This is how it goes. This is the result of a sale gone bad, in all reality this product should never have been produced. It was premature by the vendor, or poor by the end-client on a contract follow-through. Why to Ross? Simple. It needs to clear the books before year-end. There is no way this would be allowed to sit on the books and get taxed as such at the calendar year end waiting for sales on HTS. No way. It would cost them more to keep it, the hit would KO the sales initiatives for further exclusives. Ross has shown positive sales w/ joe product, they have made a nice niche picking up Joe exclusives and clearing product in a matter of days / short weeks. This is a good thing for us. So in a nutshell, why send this to Ross rather than letting it sit on HTS for a few months? Lets back this up to November, and you're the inventory control manager at Hasbro. You have 100+ pallets of this cancelled exclusive on the docks in China; you're paying monthly storage fees, you're about to get a massive tax loss for having this on the books come December 31, you're missing sales quotes because it is inventory that is unsold, and it is a MASSIVE inventory liability from a loss prevention factor. You would do the same. It is good business.
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12-20-2010, 03:32 PM | #8 |
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Quote:
I can understand that argument. But then, aren't they assuming their product is going to fail? Or at the very least selling it short for its potential? I only worry about it because I worry about the health of the line in general. Too many releases relegated to discount stores means Hasbro green lights less new product, or cancels it all together.
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12-20-2010, 03:33 PM | #9 |
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Quote:
HTS = sending from China to a warehouse in the US, stocking, distributing, managing online sales, fullfillment, sorting, fullfillment, use tax & sales tax.
Ross = one time / ship from asian factory / storage to end-client via coastal import / container load, paid with Net 30 (standard). This is a no-brainer. This was a Target exclusive, booked on the financials as a 1 time sale paid by the end-client, no storage / housing / marketing required. The margin is not available to sell these at HTS, which is guaranteed to have limited resources / space and under planned constraints already. If an item is going to HTS, it starts it's life with that objective, is slated for and designed to go there from the factory, or would be in such limited quantity / high dollar that the margin is available for online sale (SDCC exclusives). This is simple, very basic good business practice. Booked as a sale to Target, after ROC stagnated and was clearanced out they cancelled the sale, which in all probability required extensive procurement negotiation to do so since Hasbro had already made the product, and prepped for shipping. Either Target stuck it to the vendor, screwing Hasbro as happens in the industry every day (and the vendor is stuck with the product on the loading docks, left w/ the bag, but nothing they can do since this isn't going to affect the relationship w/ a major market buying franchise like Target), or someone on the procurement legal side of the house at Hasbro really screwed the pooch on a bunk contract. This is how it goes. This is the result of a sale gone bad, in all reality this product should never have been produced. It was premature by the vendor, or poor by the end-client on a contract follow-through. Why to Ross? Simple. It needs to clear the books before year-end. There is no way this would be allowed to sit on the books and get taxed as such at the calendar year end waiting for sales on HTS. No way. It would cost them more to keep it, the hit would KO the sales initiatives for further exclusives. Ross has shown positive sales w/ joe product, they have made a nice niche picking up Joe exclusives and clearing product in a matter of days / short weeks. This is a good thing for us. So in a nutshell, why send this to Ross rather than letting it sit on HTS for a few months? Lets back this up to November, and you're the inventory control manager at Hasbro. You have 100+ pallets of this cancelled exclusive on the docks in China; you're paying monthly storage fees, you're about to get a massive tax loss for having this on the books come December 31, you're missing sales quotes because it is inventory that is unsold, and it is a MASSIVE inventory liability from a loss prevention factor. You would do the same. It is good business. |
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12-20-2010, 03:34 PM | #10 |
Crimson Guard
Join Date: Feb 2009
Location: quad cities
Posts: 4,918
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Damn. That is an awesome explanation of the situation. Thank you for taking the time to lay that all out, I wouldn't have thought of any of those factors.
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