Been busy… found a new obsession along with some toy nooze…

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Been busy… found a new obsession along with some toy nooze…

Its been a while, but in the last week, I finally got permission from Amazon to start selling again! I was banned sometime last year… that a whole ‘nother story, but now I’m back in action, and this time, I wanted to better streamline my process for updating quantities, changing pricing, and managing primary inventory levels across multiple 3rd party selling venues. Using some fancy formula finger work along with my penchant for spaghetti coding, I’ve created a whole basic management system using Google Sheets! More on this later as e-commerce interactions have been something of an on and off hobby of mine for the last 17 years.

In toy news, lots of good things!

1) Retro Nintendo consoles have just been announced for release later this year! This includes the popular NES classic that sold out immediately a few years ago, and a new Japanese ‘Fami-Com’ system that features all Shonen Jump games in celebration of the titular magazine’s 50th anniversary!

Retro gaming is definitely one of the hottest tickets outside the Disney juggernaut with great history, an appreciation for 8-bit designs, and a slew of wild, organically loved licenses of yesteryear. Nintendo has really been the only system maker who’s retro systems actually see any type of demand which goes to show how much of people’s childhood they control over the likes of Sega and Atari. I personally am looking forward to the Fami-Com edition. It won’t be available in America, so I might need to try and pull some favors with some connections in Japan to make this happen. I do feel it’ll be a hot ticket, and with TRU out of the picture, I can see other major retailers owning up to bigger chunks of business and also related venues like Hot Topic and Box Lunch which do cater strongly to gaming lifestyle goods.

2) TRU is closing out fast and it was revealed that the company will be shelling out around $350M just in bankruptcy fees.

No toy news would be complete without something on TRU nowadays. Its a rough time. With workers, executives, and politicians weighing in on the demise of TRU, the job loss count has been calculated to be anywhere around 30,000 (B. Sanders) to 133,000 (I. Larian). Seems like there’s still money to be had, but on the legal side of things. Painful to hear and it doesn’t make these growing pains any better. Note to all those former TRU workers: its easier than ever to get into selling online. You’ve got the experience, and the industry doesn’t have an official voice yet. Get heard, get to selling, and get paid.

2) MGA is killing it with their victory judgement of $1.1M and injunctions on overseas counterfeiters of the popular LOL Surprise product.

Though I’m pretty sure they’re not the first, MGA has proven that even in this day and age with internet everywhere and the ambiguity of world wide licensing control, protecting one’s IP is still achievable and enforceable. For the longest time in my own specialized industry (anime collectibles and media) bootlegging and counterfeits are of an enormous burden on all who are trying to make an honest living selling it here in the US. It was particularly troublesome in the late 2000’s, and even today, you can jump on EBay or Amazon and find fake products being offered form international sellers by the tank load. Most I’ve talked to including licensees, licensors, and distributors claim chasing these sellers would be extremely expensive financially. And being there were larger avenues of selling available for domestic product, the official goods should drown out the bootlegs. As more and more of these ‘larger avenues’ start to disappear though, the reality is starting to set in that in the long run, not addressing the issue early will not only cost a company financial trouble, but IP integrity trouble as well. To all IP holders out there, your IP IS your business in my opinion. Protect it at all costs. Now if we can extend this to that pesky parallel import issue…


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Perspective on The Toy Association Perspective: #SaveToysRUs

In an article I saw posted in LinkedIn, Bob Wann, chairman of the The Toy Association Board of Directors, explains the group’s belief on why brick and mortar stores like TRU are important, and offers their support.

Basically, physical stores have been a cornerstone in the industry for customer discovery and purchasing, which I totally agree with if the opportunity presents itself. Having had both a physical and online store for so many years, I can most certainly understand how the power of the in-person presentation is much more effective in persuasion of purchase. This is where the true artistic art form of character building salesmanship comes into play from the store display, initial greeting, product showmanship, the closeout and the follow up. These elements build a stores ‘character’ and encourages true future customer engagement.

Though I do agree with the idea and I certainly want to save TRU, the statement leaves questions about a few points mentioned that never really get addressed.

The first is in the very beginning of the statement: “seismic, disruptive change.” Its followed with concerns of confusion, uncertainty, and ‘far worse’ news of the closing of TRU making it sound like the idea of change is bad in my opinion. This is really just a set up to express a sort of relief when it goes on to mention the possible salvation of a number of TRU stores that might happen. Saving TRU sounds like a good idea, but in its current state, it would make for tough business.

If anyone took a wide lens look at business in general today, every industry is going through massive change, and its always for the better of the consumer. From everything that I’ve been taking in from tech to toys, ‘disruption’ is something we are trying to achieve (market disruptor, anyone?).Everything from taxis to takeout, from physical fitness to mental wellness, and even employment has gone through ‘disruptive change.’ Most of the business tactics before the disruption were good for the industry as they were, but admittedly, I find the new change to be better. Its forcing stagnant, complacent companies to finally take the initiative to innovate, and the toy industry is long overdue compared to others. I’m still waiting for my real deal Hover Board, not the chintzy, explosive Segway wannabe.

The second issue I have with this statement is that although it explains that in-store discovery is important and touch/feel/play is magic, it doesn’t really explain any way on how to get customers back in stores. I mean, its great if kids can do this, but how can that happen if they never go in? This latest bankruptcy is not the first rodeo for TRU, as financial issues stem as far back as 2005 when they made the loan deal that locked them into a losing game according to the Fortune article here. So, this should indicate that simply having a place to go doesn’t really bring in an audience. Let’s be real here: kids don’t play with toys the same way they used to. Kids don’t play to entertain themselves so much as they want to entertain others or to watch others entertain them. This is why the surprise style toy is so big. Its also why discovery is no longer done in store for most people, its done on social media. From what I’ve seen with most hot toys recently, people discover items not sitting on shelves in a store, but in YouTube box openings, convention reviews, and a network of friends. That’s not the same as thinking the majority of customers discover items in-store.

Speaking a little on the TRU finances, I’ve read where people mention that TRU would have been profitable earning $350M in 2017, but they had something like $400M in interest payments from there 2005 deal. In other words, TRU was not profitable. I can’t understand why people don’t see that. Its akin to saying, ‘I would have made $1M in sales if it wasn’t for that pesky $1.5M in production costs.’ Obviously, no money earned.

Should the industry band together and save some existence of TRU, I’d like to suggest a few tips on what to consider in observation of the masters of the next-gen retailer, Amazon.

1) Lead the industry by having useful information. If you ask any modern consumer, and I’m hoping the industry as a whole is targeting modern consumers, they will all tell you the first place they look for pricing/availability is Amazon. Why does Amazon get to be the first option for TOYS? They’re not even a toy website. Change that. News, special promotions, offers, and release schedules should be found at TRU’s website. I’m not talking about TRU info, but all this info from toy producers. Create a website plan where product producers can curate and merchandise their products directly on TRU’s website. Add that to the marketing arsenal of the retail shop, and you’ve solved two problems in the industry: modernize TRU to compete with Amazon, and build an effective way to market for toy manufacturers to an endemic audience without needing to branch out of the industry. Facebook and Instagram are great for outside the core toy audience, but these platforms are far from ideal for the industry.

2) Earn consumers trust. In a recent article on Inc.com, its stated that trust is just as important as price in the modern retail environment. Although traditional ways of gaining trust through donations are fine and dandy, more is needed today including visibility of the personnel. Every once in a while, Jeff Bezos would put out a scanned copy of an announcement for upcoming news for amazon right on the front page. I can’t believe 100% that it truly is Mr. Bezos who’s doing that, but the perception is endearing for most, and it makes anyone who visits Amazon’s site more comfortable. Another way would be to foster a strong network of influencers from various social media platforms. YouTube’s been under a lot of heat recently with misguiding kids to inappropriate info, and as YouTube gets more and more saturated with this type of content, its more likely kids will fall in to this trap. Build a ‘toys only/approved, authorized influencer’ platform just for toys accessible through the site and a proprietary app. This will keep kids glued to the smart phone in a self contained environment of just the appropriate subject matter. Also, feature influencers with appearances at various locations around the country. Everyone loves a local celebrity.

3) Have the products people want. At this moment, I can order something from Amazon, and have it ready to pick up at a locker location by the end of the day. Its always a good thing when the store you go to always has the one thing you’re looking for in stock when you get there. I know pick up services have been around for a while, but the difference here is Amazon has EVERYTHING available including exclusives from everywhere. Will TRU be able to do this? Maybe they can partner with Hot Topic or GameStop so whenever they get exclusives that TRU can offer them as well, or TRU can simply capitalize off the fact that they get the ‘first to market’ news and offer before the rest of the industry. This move can ruffle some feathers with clients, but this is a key component to the success of Amazon.

4) Make the process quick. When I go to an Amazon locker, I scan my smart phone and a locker pops open for me to get my product. TRU needs that same convenience. Most online pickup options have me waiting in the Customer Service line, behind all the returns, then waiting for the clerk to figure out who I am and what I’m doing there, then waiting for the clerk to find my product. Add pickup lockers, in the middle of the store so people can grab there goods and get a good view of all the impulse items along the way.

And now this journal entry is three times longer than the original statement released… Just some bubbling ideas that popped in my head when reading the statement from the Toy Association. Embrace disruption, and lead the industry as you were meant to do.

About The Toy Association

Founded in 1916, The Toy Association™, Inc. is the not-for-profit trade association representing all businesses that design, produce, license, and deliver toys and youth entertainment products for kids of all ages. Our 950+ members drive the annual $27 billion U.S. domestic toy market, and our organization has a long history of propelling the health and growth of the toy industry, which has an annual U.S. economic impact of $109.2 billion.

http://www.toyassociation.org/ta/about-us/toys/about-us/about-us.aspx


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Toy News Review 4/5/2018

Here are my thoughts on some recent toy news:

KB Toys Announces its plan to open 1,000 pop up toy stores!

https://icv2.com/articles/news/view/40053/owner-kb-toys-brand-hopes-open-1-000-pop-up-toy-stores
https://www.retailwire.com/discussion/kb-toys-plans-a-christmas-comeback/

There seems to be a great deal of wishful thinking on the side of KB Toys in the wake of the TRU collapse. Though it sounds like this holiday season may be saved for toy retailers, the idea of ‘we’re creating a physical shop with a grander experience’ is dead. Unless you can create Disneyland, there is no retail experience that i can think of that can motivate people to go to a physical shop anymore. And that should say a lot coming from a guy whose sole livelihood depended on engaging retail experiences for over 10 years. Some more service based businesses can pull this off, but if the bottom line of your physical business is to sell actual products, its not going to work.

Long term customer loyalty and community are the keys to any physical business, and its extremely difficult to do that in this very expense age. If the idea of a toy shop is simply going to be seasonal pop up shops like the Halloween store, it’ll be sustainable, but with a limit and a much lower market relevance.

The only way any new physical brick and mortar operation will succeed will be when retail real estate prices collapse. Products are already being produced at the lowest possible cost with the cheapest possible quality before becoming toxic, and the cost of employees is rising, but that’s a resource that is directly responsible for income for the business and can be tuned to grow substantially in a relatively short amount of time. retail real estate prices both purchasing and renting, will need to adjust in order to make shops a viable business opportunity. As online sales continue to take market share, the cost of retail leases needs to adjust along with the diminishing profits of a business. It won’t ever happen because managing land is a business in itself, but maybe this is just a sign of the times where toy stores are simply not needed.

Even the comments in these articles hit on some common sense hurdles that a ‘guest KB Account’ tries to counter, but falls into that ‘wishful thinking’ category with answers with no real substance. Each answer had already been debunked by failed business attempts in years passed. The most positive point is echoed as ‘that’s an good idea.’ Good idea, yes, but a bad business.

Amazon buys into LotR TV Series deal

https://www.hollywoodreporter.com/live-feed/how-lord-rings-tv-series-landed-at-amazon-not-netflix-1099213

Massive deal considering the movies hold up well today almost 20 years later. Even the Hobbit trilogy stands up against time even those the story and musical numbers were lame.

With this mega video license will also come a windfall of opportunity for licencors if Amazon doesn’t own all of them for the TV series as well. What better advertising on Amazon can you get than from a property owned, viewed, and already promoted on the biggest selling platform in the world?

Amazon could probably quite easily produced every single product in a licensing catalog if it really wanted to with all the intel its gathered over the years from white label manufacturers from all around the world and the insight that tells what the hottest type of items sell to specific age demographics for specific licenses. I’m expecting this to be THE next must-binge series after Game of Thrones.

Toymakers struggle to crack the code of what kids want

http://www.chicagotribune.com/business/ct-biz-big-toymakers-troubles-20180402-story.html

This isn’t new news. This is what the toy industry does on a daily basis. More attention is given now that the primary leverage toymakers once had with TRU and other larger retailers looking to try new things disappearing, and the great retail expanse of the online world is still a unbelievable mystery to long time industry veterans who’ve fallen far behind other industries like gaming.

The article highlights for me a few glaring realities: toys nowadays have fallen victim to the ‘fast-fashion’ production model where cheap, disposable products are the norm. Toymakers need to find a new model in building a brand from there own marketing efforts and be less reliant on retailer marketing. Movie toy tie ins just don’t seem to have the same effect as they once did, and Makers need to go global to find growing markets. There is a point at the nd where it mentions parents will want to give their kids STEM toys or share Star Wars, but that sounds like buying toys more for the parents than for the kids. I’ve never heard a kid as for a STEM toy, and if it were so popular, then why is Lego falling? Regarding Star Wars, after the last movie, my kids want no part of it.

So long Minecraft: Fortnite passes Minecraft in YouTube viewership

https://www.vg247.com/2018/04/02/fortnite-officially-surpassed-minecraft-youtube/

Finally, that repulsive, beta-looking, blocky ‘game’ design can be laid to rest and finds its place among other dying Microsoft gaming products in the shadows of greater titles and experiences.

I’m guessing this is where the early Minecraft audience went after growing up. They made Minecraft big then, and the same generation is now moving on to Fortnite. This is a generational trend someone needs to take notice. Minecraft is really old hat nowadays, and with no true innovation coming up, I can’t see it growing any larger for Kids than it already has. It may have buy in with the educational system, but as far as kids and the passion kids have, that phase has passed. If I had to give an example: its like when I was given a Captain Planet figure from my school because it endorsed the TV show. You didn’t really want it, but the idea was good from the school. What you really wanted was the new TMNT Casey Jones figure. That was passion.

I expect Fortnite to continue to grow as it fosters stronger community through open channel communication as well as competitive play which is addicting by human nature.

Small business and how to do it

https://icv2.com/articles/news/view/40003/mining-outside-diamond

Great article that puts many touchy subjects for small business owners out in the open including a list of distribution resources. Definitely worth checking out for any small business owner.


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Walmart + FedEx = Losing Partnership

Recently, news outlets have been spouting out how Walmart is positioning itself to take on the beast that is Amazon by strengthening their partnership with world renowned shipping brand, FedEx. This news coming off of the sad release of TRU’s announcement was seemingly put into affect to comfort those shopping consumers that of the the major players is looking to foster more convenience that casual buyers are always looking for. Sadly, this type of partnership is too little too late.

In an article released on the CNBC website, Walmart will be installing FedEx offices in 500 of its stores in its ‘race against Amazon.’ The proposed benefits with these offices in place don’t sound very progressive. As a matter of fact, they sound rather traditional which in this environment is a dangerous way to proceed. One of the benefits was said to be that visitors to FedEx have boosted foot traffic in Walmart… that’s one hell of a shopping impulse. It almost sounded insulting that FedEx would have the gall to suggest they would be responsible for any type of bump in traffic. However, I wouldn’t totally discount it because it could be a telling of how much Walmart is actually hurting. I’ve been to many FedEx offices. Believe me, there isn’t all that much traffic to be proud of. Maybe a Krispy Kreme shop in the heyday of doughnuts, but a mad crowd at FedEx? Please…

The article goes on to discuss the other benefits told to them by the partnering companies including local pickup convenience and possible temporary storage space usage… which I don’t think there’s a serious demand for. I could be wrong, but I definitely have strong doubts.

Of course, nobody really addressed the elephant in the room… how is this actually going to lend advantage to FedEx or Walmart against Amazon? Amazon outclasses Walmart in every wholesome sense in product and service, and Amazon’s also started to take point on its own logistics leaving both of these legacy businesses wish they were somewhere else.

“But Walmart’s the leader in low prices. They’ve always go that!” This is true, but this will also be their downfall. See, Walmart’s always been the low price leader, but you’ve got to have an industry to lead. Too many industry icons of retail have fallen off with more to come, and if Walmart is the only player in the game (brick and mortar convenience store), it becomes the only price. The company will then need to look at the leaders on other platforms which leads to Amazon, but before Walmart can ‘lead in low price’ Amazon will have already made its money and moved on to the next thing. And the prices for new items on Amazon pretty much put Walmart in check to where they won’t win on leading unless they lose… strange turn of phrase…

In addition, Amazon’s actually got Walmart beat on inventory as well since a Walmart can only carry some much stuff in its own stores regardless the size, and its always got to manage turnover or pay the price. With Amazon, you get everything that’s offered in Walmart PLUS the rest of the world as 3rd party sellers are Amazon’s decentralized buyers, suppliers, shippers, and marketing team to say the least. And in a more genius move, Amazon offers the FBA for 3rd party sellers where independent retailers pay Amazon to hold their inventory for them. Can Walmart get any product partner to pay for warehouse storage? Not likely ever. Amazon still wins.

As far as FedEx, Amazon’s already making tremendous strides in delivery. With Amazon doing same day delivery, local pickup lockers partnering with 7-11 convenience stores, and drone shipping experiments, FedEx should be worried as well. Amazon is poised to have its own proprietary logistics just for their service and they’re very close to sealing that deal. This has all delivery services including DHL, FedEx, UPS, and even the Post Office, in a massive scramble to fill the hole that’ll be left once Amazon takes in its own shipping business.

Strangely enough, I think this FedEx/Walmart partnership will seem at face value a good idea, but it may very well simply help strengthen Amazon! If a person registers as an Amazon seller, posts on Amazon any products that are in Walmart like an exclusive Funko Pop, and actually gets a sale, that person can then go directly to the FedEx office to ship it out. Walmart and FedEx get there cuts, but so does Amazon. Crazy right? As a seller myself, I do prefer to use USPS because of the better rates for the comparable service, but the convenience of having a FedEx office right at my point of purchase might just give a little more benefit to FedEx over anyone else in this dated relationship. I might use FedEx to get something to someone if I was in an extreme rush, but I think I’ve done that perhaps twice in 20 years.

This collaboration won’t be a disaster, but it won’t have any long term impact as it has no way of controlling any advantage over Amazon. With 80% of online holiday sales already under Amazon’s grip, the future of retail as a whole will more than likely follow along side leaving any competition who think brick & mortar first in the dust.


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