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Post by xiombarg on Jun 5, 2008 13:00:28 GMT -5
Here's a little diatribe that's been on my mind lately. It might be an understandably boring topic for some of us, but my job ties me in directly to economics and the natural resources marketplace which then leads me to think about how these aspects affect our favorite hobby. So for what it's worth here is a few thoughts.
With the lull in the US economy and the extremely high prices of most natural resources worldwide which includes all metals and petroleum based anything, like some plastics.. it's not the most ideal conditions for collecting. But, these conditions could actually turn out to be a good thing. We've all seen what prices have been doing over the last two years. Remeber the shock people were having when GX-13 was announced as having a retail price of around $150? That's pocket change compared to what we've seen since then. So with the wacky changes in worldwide economic conditions, pricing will likely be put back into perspective, and without too much sacrifice to quality or details since expectations have been more than firmly established.
It's likely that erratic economic conditions will make it tough for some of the smaller companies, but on the other hand companies like Bandai and Takara have really stepped up to bat, recognizing that quality and consistency is what sells products, not just names alone. In fact both of these companies are at the top of their game in my estimation. I give both of them full credit for producing as good of products as they ever have and with prices that are reasonable.
There are a couple of downsides that have taken place also. I've noticed that Ebay listings have decreased by international sellers trying to cater to the Americas. And online stores such as HLJ and Toy-wave are starting to carry smaller inventories, or not carrying some products at all. But I suspect that as things start to rebound and stabilize, these retailers will once again carry a more full selection.
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Post by lurkerx on Jun 5, 2008 19:16:35 GMT -5
Well it could go either way.
The recession will decrease demand as less people are able to afford.
The soaring energy prices will increase the cost production such raw materials as well as labor as it would cost more to transport and process the materials; Employees will demand higher salaries due to how energy prices are impacting them.
Best we can hope for is a wash in the interm.
After the recession, should energy prices maintain its price we should expect an increase in toy prices.
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Post by xiombarg on Jun 5, 2008 20:33:22 GMT -5
Normally I would say you are right, but considering that toys and figures are luxuries and not neccessities, raising prices on toys when demand is low because of a recession gets a toy company nowhere. Sales of luxury items like toys have to be affordable during hard economic times, and quality becomes all the more important as toy products suddenly have new competition with the dollars that might be spent on everything from movies and entertainment to luxury foods, restaraunts etc.
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Post by lurkerx on Jun 6, 2008 12:45:39 GMT -5
Normally I would say you are right, but considering that toys and figures are luxuries and not neccessities, raising prices on toys when demand is low because of a recession gets a toy company nowhere. Sales of luxury items like toys have to be affordable during hard economic times, and quality becomes all the more important as toy products suddenly have new competition with the dollars that might be spent on everything from movies and entertainment to luxury foods, restaraunts etc. Regardless on whether goods are "luxuries" or "necessities" manufactures will not "give" them away. Obviously they'd have to compensate for the rising cost of production and as such either maintain current mark ups, slightly reduce them or maybe even increase them slightly depending on what the market will tolerate. I believe they are more inclined to keep prices as they are until the recession is over at which point they would adjust their mark ups to reflect their increased production costs as well as revenues they would've earned had they not decreased mark ups. I mean it really does not make sense for Bandai to invest in the production of a SOC were they not hoping to recup their cost inclusively and make a profit whatever the economic conditions. If that was the case then why even bother producing a good? Take a luxury BMW sport coupe for example, you don't see a 2008 BMW 335i selling for $20K or $30K or 40 or even $45K just because the economy is currently sour. The dealer could throw you a couple of floor mats take a thousand bucks off, cut you some slack on the financing/lease rates as a token but overall the price stays at $50K.
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Post by xiombarg on Jun 6, 2008 14:07:09 GMT -5
A BMW sport coupe is probably not the best example here because its target market. I would think more along the lines of a Toyota Camry, which could very possibly decrease retail pricing during an economic slow down, but I see what you are driving at, although I don't think using cars as metaphors applies in the same way.
So basically you are saying that a company has to make a profit, which is a given. Ok, but a recession hits token luxury items in the same way as if there were a new toy manufacturing competitor in town, because less spending cash means more competition as to where that dollar goes. So these figures have new competition that wasn't there before. There is only two ways to get this money from the collectors wallet into theirs. First is to make top quality products, so much so that collectors are compelled to buy them. Second is that the price must remain within an affordable range, and then hope that quantity sales will make up for decreased margins/increased material costs.
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Post by lurkerx on Jun 6, 2008 15:25:24 GMT -5
Actually, the Bimmer is as good example as the Camry as both are to a certain degree “wants” as opposed to “needs” I can’t see anyone needing a Camry were they could’ve purchased a Corolla. Of course, the markets for both are different yet similar. I have a bit of a problem with you using “other” luxury goods as new competition for Bots. As they’ve always been there so they’re not new and I can’t even justify calling them “substitute goods” as they’re just not even remotely similar. But I see your point. All I’m saying is: At the on set of a recession, theoretically there would be less demand chasing supply. However, eventually the producers would begin to limit their supply in line with the demand to avoid saturation and price reductions. They are already using the concept of “economies of scale” to be competitive so I doubt further price reductions will happen due to this. As for other companies investing to take advantage of this? Well, it takes a significant amount of capital to be able to do this and I doubt companies who aren’t implementing this will do so in our current economy and with the soaring cost of energy. The bottom-line is we would sooner see a decrease in new figure releases before we’d see a price drop. And in the long run it is more likely that we’d see a price increase due to the high cost of energy. Of course, that’s not to say we shouldn’t resort to the secondary market and low ball desperate ebay sellers, as I learned during my last ebay selling spree, thank god I’m not desperate. Wow, this is deep for a Friday afternoon.
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Post by zephyranthes on Oct 9, 2008 12:48:01 GMT -5
Just wondering how others' collecting habits have changed as a result of the dramatic downturn in not only the US economy but the GLOBAL economy as well. Tightening of purse strings and slowing down or purchasing as usual?
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Post by bt1 on Oct 9, 2008 13:16:17 GMT -5
Just wondering how others' collecting habits have changed as a result of the dramatic downturn in not only the US economy but the GLOBAL economy as well. Tightening of purse strings and slowing down or purchasing as usual? Yes. As a vintage guy, I get alot of stuff off YHJ/ebay and exchange rates are hurting now so prices are going up quite a bit from just even a couple of weeks ago. I'm skipping the one off vintages I may happen to see and like, and am basically trying to keep my powder dry for any "must haves" or grails that may show up at any given point (like this week unfortunately/fortunately )
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Post by tanrover on Oct 9, 2008 20:37:35 GMT -5
Credit tightening or not. Some of the prices of newer retail prices of robots are too extravagant.
I'd like to see them lowered.
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Post by Godaikin on Oct 9, 2008 23:11:28 GMT -5
the current economic state would get better soon within the next a couple of months.........hopefully!
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Post by zephyranthes on Oct 9, 2008 23:23:56 GMT -5
I'm glad I'm not that close to retirement. My retirement plans are taking a severe beating. I'm also glad I have distractions like collecting robots to cope with all this gloomy news.
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Post by recca74 on Oct 10, 2008 21:51:26 GMT -5
Yeah, things are pretty financially suck-tastic, but actually have been for a while now. I'm trying to be as responsible with my cash as possible. I have to pay bills and eat first, collect toys, models and comics second. I really don't have the cash for big ticket items like I used to, so I've had to sacrifice some of the "must-haves" that have been released recently. To feed my nerdy needs, I turn to....Revoltech. However, even those are purchased sparingly. That's in on my end. I'm hoping for some better cash around the next few weeks with a financial bailout of my own. Even then, I'll need to watch out!
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Post by zephyranthes on Oct 10, 2008 23:19:23 GMT -5
Tough times indeed. I keep overhearing people talk about losing jobs, losing health insurance, etc. I'm glad I can still occasionally buy a bot here and there. Domestic toys (like Transformers) are pretty attractive in this economic climate.
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Post by crespo on Oct 14, 2008 6:49:28 GMT -5
The sad thing about this is, even if things start to get better say tomorrow, we're still looking at around a 5 to 6 year period before we can actually "feel" the rebound from the financial crisis.
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Post by zephyranthes on Oct 18, 2008 15:19:30 GMT -5
I hope to see more sales as demand for toys may drop due to the decrease in overall discretionary spending in this recessionary phase. I keep reading about retailers hitting hard times--tighter credit, fewer sales, bankruptcies.
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Post by tacitvs on Oct 20, 2008 22:27:34 GMT -5
While the lack of demand may initially cause some lower prices, a prolonged lack of demand will cause suppliers to exit the marketplace as they look to make money elsewhere. That is not good for toy collectors at all.
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Post by zephyranthes on Oct 21, 2008 0:41:28 GMT -5
While the lack of demand may initially cause some lower prices, a prolonged lack of demand will cause suppliers to exit the marketplace as they look to make money elsewhere. That is not good for toy collectors at all. I'm not looking forward to a prolonged drop in demand. That would be indicative of a prolonged recession. I'm just hoping for some good sales to come along.
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Post by silver1spider on Oct 21, 2008 20:43:05 GMT -5
Things are pretty hard all over . (my retirement funds is sucking bad) I am in Canada and the Cdn dollar has taken a nose dive in 1month. It lost over 0.10 to the US green back. The retailers are getting very scare I think. Normally, most retailers wait till after Remembrance Day to put their items on sale. Most retailers are not waiting, they are trying to grab the cash now, just in case consumer goes into further panic. (I pick up a Lego Technic: Excavator for Cdn$50.00, the normal price is Cdn$72. this is lower than the US$ 55.00) They are afraid of being stuck with inventory. I think any toys over $80 to $100.00 will have a hard time moving (i.e Ultimate Bumblebee, or Robo Sapiens) Most US toy makers, Mattel, Hasbro has cut back on their orders. The factory owners have skipped town. Some have relocated their operations to Vietnam. In this climate, raw material suppliers are afraid of not getting paid and are seizing back their supplies. They are very cautious about who they extend credit to. What is more disheartening are the Chinese factory workers that have been laid off. A lot of imported consumer goods are made in Chinese Guangdong province (southeast). A lot of workers have founded they have been locked out of factories. Some have not been paid and do not have the fare to return to their home village. Well what does this mean... I am guessing some smaller or upscale toys may be delayed or cancelled. (i.e Fewture or ...) if the producers cannot guarantee or paid for the production run up front. We will have a smaller selection of toys to choose from. Only the most popular toys/characters will sell (i.e Gundams, Transformers, Barbie, etc) what do other RJ members think?
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Post by bt1 on Oct 21, 2008 21:40:17 GMT -5
I definitely agree with you silver1spider. But it will not surprise me to see some of the toy company's go. There's just too many lines for all of them to survive with this new economic situation. They can only go so low in their production runs and only so low in their selling prices, and I think there will be some that will be bought/consolidated, while others will just fold.
From a Canadian perspective, its tough to say how it's going to affect toy (and everything else) prices in the short/medium term. Certainly, as you said, there will be deals to be had, but for how long. While our dollar has taken a beating vs. the yen and greenback, thereby costing the importers/distributers more $$, fuel prices have nose dived in the last couple of months - enough to offset? I don't know, but I can see short stock supplies in the near term as retailers get nervous about inventory levels.
Anyway, it's interesting times indeed, not just from a toy collecting point of view, but from a fundamental capitalist one the way things are going.
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Post by xiombarg on Oct 22, 2008 22:03:15 GMT -5
In a sense it is probably better that an economic meltdown happen now then say, three or four years ago, only because companies like Bandai will stick around, but the smaller companies like Max Factory and Fewture really helped to bring to light the demand for contemporary figures and also how important details are to collectors. And of course Bandai has really picked up the ball.
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