Hot Toys Star Wars Shocktrooper Full Reveal

Originally a Japanese convention exclusive that you had to order bundled in with a PS4 and  a copy of Star Wars Battlefront, Hot Toys are now releasing the Star Wars Battlefront Shocktrooper to retailers. 

So you want to sell toys? Part 2 - Selling

Last time we looked at how to set up a business and some of the numbers involved so this time let's look at actually selling.

Third Party
The third party market started off with fans who could use 3D modelling software to make add ons via Shapeways. I primarily collected Masterpieces so the Universe range was something I missed for the most part but I do remember the buzz around Fansproject releasing an upgrade set for the Universe Cliffjumper to convert a red Bumblebee into, well, Cliffjumper!

Cliffjumper in name only.

As much as we like to think of the third party industry as being big companies with toys on conveyor belts, not much has actually changed since the early days in 2008 with a number of the companies still being fans designing toys on 3D programs while someone middlemans between the designer and a factory in China. Accordingly, while some companies are an absolute pleasure to deal with, some are not easy when it comes to replacement parts because they are learning themselves how to run their operation whilst others are simply best avoided.

When it comes to third party, expect to have a number of bots lying round as organ donors because most releases will have issues. If you collect yourself, care about your customers and want to provide a high standard of service then your own collection will be very quickly missing a lot of bits. Also that profit margin we talked about last time is even smaller. Also a general rule when it comes to buying - don't get high on your own supply. Pay for everything you keep or you'll end up keeping more than your profit.

From a kit consisting of a head, 2 spoilers and a cannon to making some of the best transforming robots.

Some of the 'companies' have evolved from bootlegging and one in particular is still involved in it so as mentioned last time, be cautious of who you are sending money to on the other side of the planet. Paypal is very handy especially when certain companies decide to run off with £1,500 of your money. 

Hey KFC, how you doing?

Oh and expect delays. Lots and lots of delays. 


Packaging
One thing third party companies do well is shipping. Chinese factories are used to shipping overseas so your items will arrive pretty quickly and most of the time will be immaculate. The same can't be said for everyone though.

Expectations.

As a collector I'm fairly relaxed about packaging in the most part because I open all my figures and recycle the boxes. However when it comes to 30 year old Minibots I want them sent well packed in sturdy boxes; I absolutely do not want them sent in an envelope and yes, that has happened.

While as collectors we want our items to arrive with us bubble wrapped (especially if using newspaper so the ink doesn't mark the packaging of the toy) and in a sturdy, preferably new box...they don't come that way.

Star Wars and Pop Vinyl collectors are very particular about the condition of packaging but what many don't realise is how hard it is to supply mint packaging. If you collect Pop figures you may want to sit down for the next image. 

Reality

As you can see in the picture that is a brand new factory case of Punisher figures but the one in the middle left is already crushed and the box has buckled. If you send that to a Pop collector you can expect a torrent of 4 letter words to come at you in an email.

So know your customers. Some will be like me when it comes to new stuff and won't care about the packaging while others, like me when it comes to vintage, will most definitely care. Pop collectors know that Funko use very flimsy boxes and so part of the thrill for them is getting mint boxes. Star Wars fans generally keep their items sealed so they want mint packaging as that's part of their display while Hot Toys collectors place value on the brown shipping boxes the figures are packed in. We all have our standards and quirks when it comes to collecting and your customers will too, so know them and respect them.

Combiner Wars toys only combine out of packaging, not in it no matter how hard you crush them.

Recently I've turned some mint in box Transformers collectors away because I don't feel I can meet that expectation. As your deliveries arrive you'll find, as most fans have noticed over the last few years, that the quality of the package is in decline with most bubbles now attached to the cards by clear tape. This is because the bubbles are made of low grade plastic and glue alone won't hold them to the card.

Vintage Star Wars figures soared in price for two reasons - 1. Kids opened them 2. The packaging was designed to last for around 3 years so it had time to get from the factory to the distribution centre, out to the store and into the customers' hands. They weren't designed to last 40 years. Packaging for the most part still works the same way - it's a means to get a product to the shelves and look appealing enough for a customer to buy it; it isn't designed to be in perfect condition on arrival.

Again, order more than you list because some boxes will get very damaged along the way especially if FedEx are involved.

For when it absolutely, positively has to be there in as many pieces as possible.

Where to Sell
As this article is getting longer than intended let's have a brief look at the 5 major outlets for selling. They are your website, Ebay, Amazon, Facebook and forums.

Remember when we looked at the amount of money you need for buying stock? Multiply that by 5 and then the other 4/5ths is your advertising budget. People won't know about you unless you advertise and advertising costs. It costs a lot. Why do you buy Fairy washing up liquid? Because of advertising. Why are you always disappointed in McDonalds? Because you get served a wet squashed thing while the image on the board is of a plump mouth watering burger. Why do you go back? Because the advertising looks so good you forget about the pathetic squished bit of cardboard you were served and hope to get the one on the poster. It takes a lot of money to gain a new customer and it takes less money to retain customers than it does to acquire new ones so look after who you have buying from you because a) it makes financial sense to do so and b) do you really want to annoy the people who are paying your wage? However a tiny percentage will be far more trouble than they are worth.

Ebay is tricky these days. They take 10% of your closing price and the postage/shipping but yet if you add more to your shipping cost to cover the Ebay fees then you get downgraded for overcharging. Ebay doesn't filter results by most recent anymore and hasn't done for a few years, it shows results by relevance. By relevance Ebay means 'the sellers who make us the most money with the least complaints' so even if you're selling cheaper than your competition it doesn't matter if your listings appear on page 24 right below that G1 Warpath that is only the legs and torso that's been on Ebay for 5 years. Ebay want to be Amazon - they want you to offer free postage, dispatch quickly, offer 14 day no quibble money back refunds and have HD pictures so that they can be Amazon with you doing all the legwork. That's fine but be aware that if you move away from that model then Ebay will start downgrading you.

What you'll disover very quickly if you sell cheap items is what carbooters (garage sale hunters for those outside the UK) fail to realise - it's easy to lose money on Ebay. By this I mean that if you sell a product for £1 with £2 postage (actual cost) then once you take out Ebay's fees of 10p on the item and 20p on the postage then you've only sold the item for 70p (as you still have to pay £2 postage). Now if you remove Paypal's 3.5% fee plus 35p flat charge per transaction you're left with 20p. Factor in your time in taking pictures and listing the item, the cost of the packaging, then your time again sending an invoice to the winning bidder, packing the item, going to the post office and queuing then the leaving feedback. You've wasted your time and money. 

Thankfully I stole this image from Ebaum's World and it isn't a screencap of my own feedback.

Amazon works the same way except they take 20% of your selling price.

That leaves you Facebook and forums. These are a lot of work because a website automates the sale, while selling on these mediums involves a lot more time and then you need to manually adjust your website database to remove sales. Plus the first message you get from a potential customer will usually involve the words "deal", "discount" or "best price" so if you don't like being haggled with then these aren't the avenue for you.

Next time - customer service from both sides of the virtual counter.

So you want to sell toys? Part 1 - Numbers

Something I've been asked a lot recently is how do you set up a business selling toys. Is it profitable, where to buy from and what are some tips and tricks? So let's tackle the easiest bit first by looking at the numbers involved.

Preparation
It's important to research any market before you enter it as a business and the mistake most people make is that they don't do research. You need to know who your competitors are, where you can get stock from, how much the profit is on the goods you'll sell, do you need importation licenses if you're buying from abroad, is there room for another seller and why should people buy from you, what are you going to call yourself and is the website available for it?

Tofu King: good name for a business in theory but spacing is important!

What's in a Name?

The best ones are taken. If they aren't then it's probably for a very good reason. A number of years ago I was looking at going in to a partnership on a tattoo studio and as there would only be tattooing and no piercing, dermal implants or laser removal I thought that the name 'Just Ink' would be perfect...until someone pointed out that as a website address it'd be justink which could be read as Ju Stink. Likewise see Tofu King's packaging above.

When naming Masterforce, a friend came up with the most amazing name you could possibly hope for and better still, the website was available! However a cease and desist from Hasbro would definitely be on the cards if the business took off as they aren't going to be happy with someone infringing on their intellectual property. Your name should be fairly original, don't use a character name, ideally you don't want to have to hyphenate the name for a web address: morgans-toys.co.uk would not be a good idea for example and keep it simple. Why simple? You may be able to spell a long complicated word, others may not and also people may be unfamiliar with the word. When I ran Skywarp.co.uk it seemed pretty simple to me but then anyone who wasn't into Transformers would hear "Sky ward" or ask what a skywarp is.

"What do you mean they haven't heard of me?"

Money!

When it comes to starting up the costs are pretty big. When I started Masterforce I very quickly realised that a lot of money doesn't look like a lot of stock on a website. Despite a pretty big investment, the site looked absolutely bare and the launch had to be delayed while more stock was bought in to fill it up (a problem also affecting a new site I'm working on).

Pop Vinyl figures - relatively cheap but multiples add up.

So let's consider stock levels as even the cheapest item still adds up. The cost of a Pop vinyl figure for example is £6.50 or thereabouts plus VAT and shipping which is pretty cheap but if you want to have, say 20 different Pop figures on your site then if you find a wholesaler who sells individually it'll cost you £130 plus VAT. VAT is always the killer because £130 doesn't sound too bad but £156 isn't as much of a deal. If you are buying from a supplier who sells only in case quantities (as most do) then you will have to buy 6 of each character, so now you're buying 20 different characters at 6 of each which is 120 figures. 120 x £6.50 is £780 plus VAT or £836 including VAT. 

Most websites display 20 items on a page, so you've spent £836 on one page of Pop vinyl figures.

Transformers are worse.

When Warbotron launched they had a very large minimum order quantity per figure. So ask yourself, which would you prefer?

Or






Without giving away confidential details your money would have bought you either the minmum quantity of Heavy Noisy or a brand new Lexus IS 250.


Profit Margin/Markup
The universal way of working out the selling price for an item is cost price x 2.4. Why 2.4? Because you want to double your money (the 2) and you have to take VAT into consideration at 20% (the .4). So if you buy an item for £10 you would need to sell it for £24 in order to pay the VAT man and make double your money.

Except toys don't work that way. 

Would you pay £27.99?

Combiner Wars deluxe figures work out at £27.99 each if you use that formula. Star Wars black figures (normally £22.99) would be £38.40! Worse still Apollyon from X-Transbots would have cost £203.99.

Toys work on a tiny margin where you earn about £3 profit on a deluxe figure and £5 on a Star Wars black figure. That's in a perfect world though. What happens when you get a Star Wars case which has 3 good characters and one that no one wants? Likewise Transformers. Generations Skids is expensive and not easy to find, why? Because he came even packed as 2x Skids 2x Waspinator 2 x Dreadwing and 2x Goldfire. Everyone wanted Skids, quite a few people wanted Waspinator, no one really wanted the other two. 

This is where shelfwarmers are created. In order to meet demand for Skids you need to order a lot of cases but then you get stuck with an army of Dreadwings and Goldfires that you have to reduce to try and get your money back out of them. It doesn't take a genius to work out that selling half a case at cost price or less to get rid of them doesn't make you megabucks, especially when the other half is only making you £3 a figure.

Sorry, did I say £3 a figure, I meant £2.50 because the government taxes your profit.

In short you need to sell a lot of toys and not make any mis-steps because the small profit margins mean that one bad choice will result in you losing profit from perhaps 5 or 6 figures that were profitable. Also bigger stores sell cheaper and trying to compete will erode all profit.

Let us never speak of this figure and the money it lost me.

Suppliers

Let's keep this one short - your shop is as good as your supplier. Combiner Wars Wave 3 sold amazingly well for Masterforce but Wave 4 has sold next to nothing despite containing some good characters. Why? Because our stock arrived late. We use the biggest distributor in the US for Hasbro products but they have become increasingly unreliable. Our Frozen dolls ordered in September 2014 which would arrive in December 2014 right in time for Christmas currently have an estimated shipping date of September 2015. Imagine that order was for Age of Extinction toys and the loss would be huge. Biggest isn't always best, reliability is.

A number of Asian suppliers and manufacturers only accept bank transfers which means you are literally sending cash to a stranger on the other side of the world without any sort of guarantee other than their word. I don't think I need to explain how much of a minefield that is. The ones who accept Paypal will usually charge between 4 and 5% as a handling fee, which is understandable but is another expense eating your profit.

So let's leave it there for now and in part 2 we'll look at the process of actually selling.