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General Reference Guide for Collectors
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04-13-2012, 12:15 PM
#
5
trebleshot
Dark Lord of the 'Ark
Join Date: Oct 2008
Location: Ohio
Posts: 8,224
A Few Notes On Distribution And Shelf Space
Distribution
Contrary to popular belief, toy companies do not have any control over the distribution of their products. The retailers (both online and BNM) control how much stock they have and where it is located for purchase or storage.
Essentially, retailers are resellers of a manufacturer's product. To illustrate this process, we'll use Hasbro for the manufacturer, Wal-Mart for the retailer, and Marvel Legends for the product.
Hasbro makes several Marvel Legends figures and organizes them into a group called an assortment (or wave). Then a box is filled with the figures from this assortment. This is what's known as a case, and sometimes it will have more than one of each figure in the assortment. It usually depends on the size of the box and number of unique figures in the assortment.
Next, cases are sold to Wal-Mart for X number of dollars and shipped to Wal-Mart's main distribution center. Wal-Mart then ships these cases to regional distribution centers, and from there to individual stores based on inventory requirements. The local store's staff then puts the toys on the shelves for consumers to purchase.
Once Wal-Mart has paid for the merchandise and Hasbro shipped it to Wal-Mart's distribution center, there is not much else that Hasbro can do about the products. They can check stores to see if their products are displayed prominently and properly. They can urge the store management to fix the display or ask about empty shelves/pegs. But they cannot force any retailer to put product on the shelves, nor can they specify what kind of product to put there.
POS (or Point-Of-Sale) System
A large part of the distribution issue stems from the usage of the POS system. For Walmart and Target, virtually all ordering is done by the computer, which monitors what goes across the checkouts. Let's use Transformers for our main example:
A case in the first wave of Transformers Prime was made up of 3 Bumblebees, 2 Cliffjumpers, 2 Wheeljacks, and 1 Soundwave. Each one of those has an individual UPC number, and on the receipt may even acknowledge the ndividual character, as it may read out "Tsfmr Bumble," or "Trns Sound" on the receipt.
What POS does, is it keeps track of how many items a store has in stock, and how many it has on the floor (meaning in the backroom, and on the shelf). Once an item reaches below a preset amount, then the system automatically orders a preset amount of cases from their warehouse. And it does not acknowledge or understand the differences between Bumblebee or Soundwave.
So in this situation, Soundwave is a rare and popular character. Needed by kids and collectors alike. They can stock four cases to the shelf, and end up with 12 Bumblebees, 8 Cliffjumpers, 8 Wheeljacks, and only 4 Soundwaves.
Naturally, Soundwave is gonna sell out really fast. Even if not many people want him, but more people want Bumblebee. Those looking for Soundwave are still gonna come up short.
As mentioned, POS doesn't individualize and see they're out of Soundwaves, and low on Wheeljacks, but still has 10 bumblebees on the shelf but no Soundwaves. All it sees is they have 20 deluxe Transformers on the shelf (where you or I see 10 'Bees, 7, Cliffs, and 3 'Jacks), and a full case in the back stock, and doesn't order any more until the total stock drops to five or six deluxes left.
While I can't speak for Barbie or similar girls toys, this affects every action figure, across every brand, across every toy company. It's been the downfall of many many lines. Even popular ones. This is what affects distribution so badly, and this is something that Mattel, nor Hasbro has absolutely *any* say over. It killed Transformers Alternators and affects more recent lines such as Transformers: Dark of the Moon and Marvel Universe. It has arguably been the single worst enemy to DCUC and Infinite Heroes, as well.
The only thing manufacturers can do is try to cheat it with case assortments. And even if they dropped the case assortments down as evenly as they can, to 1 figure per case, per wave, and even that still wouldn't do much. Crazy Jetty has seen this happen in other areas of retail:
Quote:
Originally Posted by
Crazy Jetty
...[S]peaking from personal experience, it sometimes takes an act of God for an employee who is aware of a propblem to be *allowed* to do anything about it (Like clearance out figures that are gumming things up). Hell, Walmart even uses POS on fresh areas like Produce. We threw away more good produce because POS kept screwing up our stock and shipping us stuff faster than we could sell it. We'd end up sitting on literally thirty 80 lb cases of carrots, when we could only sell through maybe a case a day, with more coming in every night. So it mucks up everything. Not just toys.
That is the true source of the problem. Bad case assortments, and bad character selections will only feed this. But it's the POS which dictates distributions. Because it see's the shelf full of something, it will continually skip ordering cases from the warehouse, which is why you can sometimes see one store skip two, or three waves, while another store the next town over may get them.
Shelf Space
Shelf space is very important to toy manufacturers. The more shelf space their products occupy (or retail presence) at a given retailer, the more likely those products can be sold to consumers. The more products that get sold means that the retailer will be more willing to buy their products in the future, thus making more money for the manufacturer and keeping them in business.
[Editor's Note: special thanks to Arker
Crazy Jetty
for the section on the POS system. Minor edits for spelling and grammar by me.]
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Last edited by trebleshot; 05-10-2012 at
10:22 AM
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