Posted October 16, 2009
I am now back from the
Dallas Show, and while the mood was upbeat, few products attracted much interest. The level of innovation was down, and toy companies are making new product decisions later than I have ever known in 30+ years in the industry.
The cost of goods, and the best way to keep costs down was a subject I heard discussed constantly. A $19.95 product from a few years ago is $40.00 today, and a $40 product from two years ago is $60 this year. The cost of labor shoots up another 10% each year and the volatility of oil drives up the cost of plastic and shipping. It is a tough time to be a toy company, and as it all flows downhill, the inventors are feeling the pain as well, and will continue to.
The toy industry is a resilient bunch, but I walked out of a number of showrooms in Dallas thinking that all the product looked cheap because it was. So much had to be taken out of the product to get to the traditional magic price points of $9.99 (impossible), $12.99, $14.99 , and $19.99, and up to $29.99. After the packaging and shipping, there’s not much money left to put into the actual product itself, and it showed. If a toy is animated, with a single motor, such as many of
our successful plush in recent years, then it is well over $30 in toy stores today.
How does one make product and marketing decisions in an environment like this?
We just keep our head down and try to create great products, new technologies, and mechanisms to excite, delight and entertain, certain in the belief that like applause for a performer, revenues will come if we can work hard to be great at what we do.
Being great at what you do is a cure for all manner of internal and external challenges. I have always maintained that, as my mother would say, “Cream rises to the top.” See you there.
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