Why do 3rd party companies limit production? I don't know much about business but wouldn't making your item available when the demand is there be more profitable? Isn't the whole point of producing these thing in the first place to make money? I'm not understanding the whole "blink & you miss it" mentality that all these companies seem to have.

For example, Unicron.com made the best Energon Cubes to date. You'd think they'd keep them around but they're almost impossible to find now.

And Igear, they made MP Ramjet, Dirge & Thrust. Hastak still hasn't bothered with these. So why not keep making them available? I wasn't ready/interested to buy them at the time but I am now. A lot of people missed out on them.

 

Here are my thoughts on it. Although it is entirely speculation and assumption.

When a 3rd party company commissions a production run of their design they have to make so many to meet a minimum. Lets say as an example 10,000 units. At $5 a pop they are spending $50k to get them made.

So the 3rd party company knows they can sell enough of those 10,000 to make their money and a small profit.

But when the second time comes around they don't see the same demand. Those first 10,000 filled it pretty well...

But not entirely. This is where the late comers say "OH MAN, I wish they would make more!" So then there is a handful of people who still want the item.

But is it financially viable for anyone to spend $50k to appease a small group of people? What if they sell 150 and then the demand is gone? It seems there would be a lot of risk associated with additional limited production runs.

Business is business.

 

I was under the impression that if they sell over a certain amount of units, then they run the risk of coming under heavier scrutiny by the IP holders (Hasbro, Takara, etc) since it may, at that point, be labeled as "mass production".

Even though it's IP theft, if the quantities being sold are a relatively small amount, then it wouldn't be worth their time as it wasn't really making a dent into their regular sales. If more quantities are sold, and signs show that people are selecing the IP-infringing product instead of an "official" item, then they would likely get their attorneys ready to pounce.

 

sort of what he said^^ they don't have the funding that hastak have so unless they have the funds to start the project from word go i think most third partys rely solely on pre orders

dalianjj shed some light into how much it costs just getting the molds cut..

http://www.tfw2005.com/boards/transformers-3rd-party-discussion/727073-fanstoys-ft-03-g1-cartoon-shockwave-way-62.html#post8753322

tf 3rd partys sell to a niche market so a big gamble unless you have built up a reputation

 

An excellent point raised by the OP countered by an excellent, well thought out response. It's like the old days of "teh interwebz".

 

This is the same exact case with Hasbro and Takara products. After time, the products are gone from the primary retail market, and your option is only secondary market to buy it. For example, someone who might start collecting Classics figures now, can't blame Hasbro for not having them available still at retail. Hasbro has to move onto newer products. Same as 3P. They make their production run based on the initial interest by fans. Some 3P companies have done reissues, like Fansproject. But its only for very popular and demanded figures. Also, with reissues, factories still will enforce a minimum production run. So if the run is higher than what the demand really is, its not a good business decision for the company to go through with a reissue.

Everything is a limited run, not matter how big or small. Someone will end up missing out eventually.

 

You could ask the same question to Hasbro why they stopped making the G1 toys from 80's. (I know there are reissues but that is not the same.) If you go on eBay G1's go for so much! just make more!
3rd party companies also do not have the same means as bigger companies like Hasbro. Companies like Hasbro can make 1 mil Bumblebees and still be in business afterwards.
Fans Toys is a 3rd party company that saw the demand for Quakewave and made three runs of him. Everyone of them sold out, but each run was smaller because the people willing to pay for him already bought theirs.
Like Hasbro, 3rd party companies need to make new products too. They can't make the same thing over and over again.

 

My answer to your initial question has been pretty much covered already in previous posts.

But I had to chime in and agree about the Unicron.com Energy Cubes. I bought two sets when they cam out and absolutely LOVE them! Glad to hear someone else feels the same.  

 

even hasbro with their marketing team and market research and years of experience have problems predicting demand. When you put in an order with a manufacturer you need to give them a set number. You can better guess that number base on preorders but its still a guess. You don't want to over produce. Plus you need capital to place that order.

 

There's another factor that I think is more complicated to explain but keeps me awake some nights as I try to find a way around it.

You're working with a limited amount of startup capital and production is funded with what's left over after sunk costs. So, let's say you have $10K in your budget. The first 1K cost $100 each but if you order 10K the cost drops to $10 each. Either way, you're looking at a bill of $100K.

Problem is, you've only got $10K so you can only make 100 that have to sell at a minimum of $100 each. When, or more likely _if_, those sell out, you're still way short of $100K, so your second run is another jacked up screw job. You'll run out of high-end demand long before you've saved enough to pay for mass production.

Drives me nuts. Selling 10K of any $10 toy would be really easy. Getting $100K to produce them in the first place is the hard part. Kickstarter looked like a solution to that problem but now they're demanding real prototypes before you can solicit any funding. If the US still had any small-scale manufacturing, it'd be one thing, but it's like you either make a million pickup trucks or send your idea to contract manufacturers in China with nothing in between.

There was a guy on there recently trying to start a 1:9 scale line that looked pretty promising. He'd already invested money in the molds and was running the Kickstarter to raise money for a production run. And he failed. So all of the money spent up to that point may as well have been flushed down the toilet.

 

Pretty much this. 3rd party groups have to play it safe to stay in business. Hasbro can afford an unsuccessful figure every now and then, 3rd parties cannot.

 

Q1. Why do 3P produce a limited number of a toy.
A1. Because they have to pick a number for the factory to produce. All of a toys are run at once, you know. They don't keep making these things to match demand. There is always a limited number of EVERY toy, they don't don't always tell you the number.

Q2. Why do the 3P companies TELL YOU the number of toys produced?
A2. To generate a sense of exclusivity and make you buy something NOW that you are worried will run out. This especially comes into practice for convention and store exclusives, where they seller needs to sell off his product right away to make back his investment all at once.

Q3. Why don't 3P companies just make another run of a popular limited product?
A3. If it's a toy they advertised as a limited run, and then they made more, fanboys would complain they were butt-hurt by deceptive advertising! Their precious toys had been devalued for scalping on the aftermarket or as objects for bragging! (Plus the 3P company is probably busy development their NEXT item to go backwards unless a toy was REALLY popular.)

Want examples, look at the complaining that occured when FansProject made DIA Commander after selling out of their limited Power Commander toys... They had different, but similar, decos. The complaining could be heard from here to the China.

 

The same was with City Commander. It was originally supposed to be a limited release... then they added some missles and a gun and did another run, and a whole bunch since.

So yeah... production usually isn't limited. If the demand is there... they'll make more.

 

How can they tell what the demand level is in the first place? Like right now, how high is the demand for the MP seekers? I really want Thrust, but I'm just 1 person, who knows how many others also want him?

And all those little accessories like the add-on swords & axes? I see the energon axe for WFC Megatron on ebay all the time. How do they know anybody would even want that? It looks cool but for $30 it's not something I need. How can they judge demand for something like that? Is it a leap of faith?

 

by how many pre orders sell and most of the 3rd partys are already big tranformers fans who grace the forums

 

Always a leap of faith. Even if the "idea" is amazing, its the design and execution that will determine if it sells.

Also, it doesn't matter which 3rd party group you are, everyone faces the challenge of a product not doing well. Fansproject has had sell outs, but their G3 trailer did not sell well, and they still have stock left over. I know products by certain 3P companies that are not selling well, despite overly positive talks on the board. Honestly, sometimes the buzz on the board does not indicate how well or bad a product is selling really. I've had the privilege to see actual numbers, and compare them to how discussion on the boards are going, and half the time, they don't match up. One product could have bad feedback, but be selling at a good pace through preorders. Where as other times there could be tons of replies in a thread for a new preorder, overly positive, but actual ordering is slow with retailers.

 

if u are suggesting that u can predict demand based on forum discussion then u are giving too much credit to the vocal.

preorders help BUT many people wait til product is released to see reviews before buying.

 

well i must say that i have some knoledge of the bussiness as an investor .

first producing the molds will depend on the quantity ofthe parts they could easily be very expensive

first have it desing it , if you own any 3d program (inventor , 3dmax, rhinoceros , solidworks , maya an many more) or if you but are not en expert designing it , you will have to hire someone and depending on the commplex of the project and time it could be very expensive

second prototyping it it could be made of aluminum molds or other methods and have at least 20 prototypes done: thats $3-$7k

then the smartest way will be marketing finding different kind of distributors that will be willing to sell your product (that will cost sending a proto to them) and if you are lucky they will say yes and sell them for you , if not (some distributors actually want to be sure that the project is already in production)


1 $60-$100k just for the molds mp level 150 parts plus(steel if you want high volume of production)

2 then remember that diecast molds could cost up to 50% more in the case of masterpice class

3 on top of that manufacturing the parts that could be for a toy of 100 parts like the voyager class (70-100 parts) easy from $10-$40 (dependeing on the materials

4then comes the shipping for the items

so to make everything short you need some money to start a project and hoping that it will sell otherwise is just money in the toilet

 

forgot to mention the most important part will be in finding a realiable factory and not somone that will take your money and will make you wait 1-2 years when a project such a masterpiece takes 5-8 months to be completed , i case of voyager zise could be faster

 

Can you give us an example of a figure which sold well but didn't get a good critical reception? I appreciate you may not be able to tell us a good figure which sold poorly.