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Old 11-10-2009, 02:08 PM   #19 (permalink)
topherkris1
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Join Date: Sep 2009
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Quote:
Originally Posted by solt0131 View Post
If you owned a company and could make a ton of money producing and making money on 20 different products, why would you make only 10?
I'm quoting this for simplicity, but that approach is a big #@#@#@#@ing problem for the card companies. They're actually taking that approach without thinking past the simple #@#@#@#@ing math entailed.

First off, the collectors as a whole must be separated into two markets -- case buyers (hobby shops/internet retails/flippers) and box buyers (collectors). Each of these groups have a pretty hard limit on how much money they'll invest, based on past returns and future profit margins. A caveat, of course, is that the limit may be fluid in terms of impulse buys, but the market will always correct for such purchases with adverse effects that greatly outweight the original impulse buy, ie. 10 cases of signature series this year, results in 2 cases next year, as opposed to 4 each year.

With that in mind, the cost associated with more product is fairly large when you're dealing with percentages. Additional design, packaging, shipping, will put an unneeded burden on the books without bringing in additional profit.

Thus, you get companies trying to massively cut costs to keep up such a intensive release schedule. Enter shitting designs, crappy checklists, and product delays, which raise the adverse effects on almost every product.

This puts us where we're at right now, with companies releasing umpteen products per year.

I can only assume that companies are paying for a blanket license, rather than a per product license or, at the very least, they're getting discounted licensing fees on subsequent products.

Stretching the cost of the license across many products is the only place where companies are saving money, which isn't exactly directly tied to making money, obviously.

It comes down to a massive lack of foresight on the part of the card companies, which almost directly reflects the problems encountered by the North American auto industry. Sure, it's nice to give the consumer choice, but the cost of doing so often leads to far inferior products that'll have profitable years in terms of raw sales in maybe the first year, maybe two.

However, when the novelty wears off, you're left with net losses across the board. The car and card companies assumed the answer to this problem was to create a "new novelty" and repeat the cycle.

The cycle isn't sustainable however, and it may well keep the company viable and barely treading water year in and year out, it'll eventually catch up to them. Sooner or later, the BRAND, which has been built up over many years with many millions of dollars, begins to suffer rather than just the MODEL (or product).

Hobby Shops and Case Breakers (or car dealerships in this analogy,) eventually end up abandoning all of the newer, untested models, in favour of tried and tested basic models. The car dealerships that tried to market the entire chevrolet line, eventually just went out of business. The ones that stuck to the top-3 selling Chevy models are probably still barely floating. Now, the only time the Car companies throw out a new model is if it's drastically different from everything else they produce; otherwise, the dealerships just won't carry it.

This is where we're eventually heading to with the Trading Card industry, and it's pretty unfortunate that people in charge are #@#@#@#@ing idiots.

Unless they plan on suffering the fate of the auto industry, they've got to clean up their act. Seriously, the Asian Auto Makers laid down a picture perfect #@#@#@#@ing game-plan for you:

Instead of More Products, Make BETTER products at a *CHEAPER PRICE.

This has nothing do with acquiring exclusive licenses, but the premise itself sort of guides the concept in a direction favorable to the market, but not the individual company: It's a forced specialization, rather than the rational act of specializing to increase products and associated revenue. Quite frankly, it's ass-backwards. You can rant and rave about scarcity power all that you want, but the cost is an unneeded burden for companies that're barely afloat.

So there, that's why companies should be putting out 10 products instead of 20 -- Because it'll make 'em money in the long run, not just keep them afloat in the short run.


*It's completely possible, and it has very little to do with "outsourcing" or "cheap labour," even though I'm fairly sure that the people clipping jerseys aren't making much more than joe smchoe in Korea.
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