Yeah and please don't add a random boat mode or make it able to fit GI Joes please.

 

Actually we recieved some great insight from a major 3P player and it all boils down to "the rule of 3's"

Runs are generally 3000 not 2000. On a $100 figure (generally speaking) $33 goes to covering costs, $33 goes to the retailers and $33 is protit. That would mean $99,000 goes to covering the production cost and $99,000 goes to the companies pocket. 1 combiner that is put out in the span of less than a year would put $500,000 - $600,000 of profit monies (to be distributed to employees which totals about 3 max and they don't get the bulk the owner does). So in the end the company gets (off of one combiner) $1million-$1.2 million in less than a year (of releases not total production time) to cover the production and profit. Speaking for myself if I can make $100,000 a year making toys for a hobby I adore, that would be a very great payday and a dream way to make a living. The more established groups are making much more than $100,000 a year.

So yes, these guys are making a pretty penny, why do you think there are so many groups around and more coming??? The pie is big and tasty and everyone wants a piece of it.

 

its certainly a nice amount but you have to be good. You can't just throw a product out and expect to move 3000 everytime. And if you can't move them then your stuck with the stock and end up with a loss. So just like any other biz there is a risk. So I have no problems with these companies making a good living out of this cuz of the risk they take. If the potential profit is not much then we won't have that many companies taking the risk and making all these great 3rd party products (along with some crappy ones). Secondly, I know you said money made in less than a year of release not total time spent from day one to release but it needs to be emphasized. A company may put out a few figures a year (perhaps a whole combiner team) but those figures have been worked on for a while now. So a combiner is not making the company said amount in one year. Its more like said amount over 2 or 3 years.

 

Correct me if I'm wrong, but haven't there been reported instances of some third party products being sold at wildly varying price points based on region? For instance, I am lead to understand that UniqueToys War Hawk is priced approximately $75.00 in the US market, but only around $45.00 in China.

Now, I actually agree with the Rule of Threes in principle; but in practice, are we perhaps seeing a much larger portion of the portion being transferred to the retailer than at first estimated?

 

depends on their supplier. for example TFC sells everything through Robotkingdom who then sells it to bbts/tfsource/etc

so in that case you have 2 retailers/shipping as they're not getting directly from the company.

 

There's no way any of those numbers are right

I highly doubt they would be making that much profit when hasbro's profits for entire years of production are only slightly higher.
Also with that large of a markup from retailers we would be seeing a greater range of prices as a natural result of competition

 

$(000)

 

Business is risk. If going into business was gauranteed profit we'd all be business men , woman and children. BUT if you do it right from top to bottom there is a lot of money to be made.

Let us use the rule of three on FT Quakewave. At $150 , $100 goes to FT to cover expenses and profit. They sold out of two runs that by the rule of three and a guesstimate by someone in the know will equal 6000 units minimum. That is $600,000 off of one release, not bad scratch at all.

But I do agree you still need a solid product (and a voice with the fandom) to achieve those sale numbers.

That $30 difference, in my opinion, is a small fraction import fees and a large part cash grab. That is not a solidified fact but I would put money on it.

That is 600 million not 600 thousand. lol

I'm pretty sure that Hasbro broke a billion in one of the movie years. Those stats are showing money that the specific line made, not how much Transformers made. We all know that there is consistantly more than one TF line on shelves at the same time.

 

the $(000) up top means you need to add another 000 to each number so $600,000 means $600,000,000.

 

This, and that $33 per figure, you need to have that upfront to develop and tool and produce these figures before you ever see a penny back in returns. All very well and good if you have $99,000 sitting around with nothing better to do, and a decent designer, and the right product in mind.

 

That initial $100,000 (or more or less) and lack of a good designer is what keeps most at bay.

It is a high risk and heavy investment going in to the game but being a fan of the franchise and being active on the boards will give you a pretty good idea who to make and how much people would pay for it. At least that gets rid of some of the risk invovled.

 

Very awesome interview Teej. Some interesting insight on the inner workings of this company. Granted I am guilty of not owning any of their products (though impressive, KM is indeed a niche product line), but Sixshot is going to change that, and their Predaking has already won in my opinion and I WILL be getting him. I'm really excited to see what else these guys do with this line.

 

That would be my guess. It has been my experience - and I would not be surprised to learn from someone more versed in elementary economics - that pricing frequently gravitates toward a point that the market can support, rather than what a product is necessarily worth in terms of raw value. For instance, mid-2000, one could purchase a CD in the UK for fourteen pounds sterling, and the same CD in the US for fourteen dollars... despite the exchange rate favoring the pound by a factor of almost two.

Similarly, I think what we are seeing here is acknowledgement that US and UK-based collectors are willing to pay a premium for their products; and that retailers will therefore charge accordingly. If a fan is happy to part with nearly a hundred dollars for an official TakaraTomy product (albeit mostly due to exchange rate issues), then why not the same with an equally-sized third party product?

What I'm curious about is the division between actual importation costs, additional profit for the manufacturer, and additional profit for the retailer (or, as was pointed out earliaer, retailers that also serve as distributors, such as is the case with TFC and RobotKingdom). Of course, that sort of information is far from easy to obtain, unfortunately.

 

I am very curious as to how some third party manufacturers are able to hit the ground with such ambitious products (FansToys and Planet X spring to mind). One can only assume that they have access to investment capital that allows them to defray their start-up costs.

 

They may have the backing of investors

Or they're just rich to begin with, an finding a third party is just for fun

 

Question? Where are the main 3rd party companies located? I heard that FP is based in Canada, as well as MMC but I'm interested to know where the rest are based in. I ask because, I'm curious to how they are able to keep their cost down so low, being based in a develop country, to make this 1/3 profit everyone is speculating.

I'll start the list:

FP: Canada
MMC: Canada
Maketoys: Japan
Igear:
Planet X:
Fans Toys:
TFC:
Perfect Effect:
Toyworld: Japan

 

All of those companies have overseas *production facilities* but their actual members can be based everywhere.

TFC guys live on China so I feel comfortable saying they're "based" their but Fansproject is made up of multiple members on both sides of the pond. One of the FP guys actually spends time in like three different countries ( from the one Botcon I met him). So are they "based in Canada" if there are members in Vancouver, Toronto, California, Hong Kong, and Japan?


And I am pretty sure ToyWorld is homies with TFC so they are also in China. This is based on shared design aesthetic and some remarks in a thread about Hegemon.

Lastly, I have no inside info but I suspect these companies don't advertise their "base" for a reason. If I knew anything, would they want me publishing it? Doubtful