ARE HIGH FIGURE PRICES AN OPEN INVITATION TO RE-CASTERS?

[elanlane13]

What Darren said sums it up very well.

 

[fogie]

Some highly interesting and illuminating responses here to a contentious and brave original question. I simply don't know whether high
pricing structures promote re-casters. One thing is apparent though - we all condemn re-casting and wish it gone. The answer to that is
just as apparent - it may seem glib but we must all put our money where our mouth is and stop buying them. Manufacturers will then
structure their prices where they will, and we will be free to buy them or not.

 

[NeilW]

CAN I AGAIN CLEARLY STATE THAT I DO NOT CONDONE RE-CASTING: AS I NOTED, I SIMPLY ASKED WHETHER LOWER PRICING COULD, AMONGST OTHER THINGS, REDUCE THEIR ATTRACTIVENESS.

SO PLEASE DO NOT ACCUSE ME OF SUPPORTING RE-CASTING (and I'm certainly not "... one of the people that come up to me at shows and say "what are you releasing next then?" with no intention of buying it from me.").

My answer as a figure manufacturer and also someone with a degree in Marketing, and working as a Marketing Director;

Thanks for that: I did ask for responses from actual manufacturers (though you do acknowledge that this is more of a hobby business than your living).

I take on board that some, including yourself, do not adopt a premium pricing strategy. Indeed, £16/12.80* + P&P are relatively cheap even for 1/32 figs and pretty-well match the re-cast prices that I've seen (but NOT bought).

* though I see that you charge £25/30/35 (UK/EU/RoW) for this privilege (plus a 'free' fig), so some of this is recouped as revenue.​

Thanks for the insight into your costs: if 100 sales allows break-even then that suggests costs of somewhere between £1,400-1,600 per fig. Of the costs you note, 1/2/5 are largely fixed (some of 5/overheads are semi-variables) and 3/4 are variable (with, I suspect, few available economies of scale). However, without knowing the precise costs it is impossible to do any accurate modelling.

Neither do we know the level of elasticity, but I would suggest that it is positively elastic (as opposed to unitary or inelastic) but again, not knowing how much means we can't model price/demand scenarios.

Nevertheless, with your Marketing Degree, knowledge of price elasticity of demand and professional experience*, you'll no doubt recognise that IF a lower price point results in more sales then the maths changes and that IF , say a 20% price reduction, results in a >20% resultant increase in unit sales, then it COULD result in greater contribution and profits.

Now, this might not work for your small business (and you know it, your figures and market best), but the point stands that it is theoretically possible (especially in premium priced markets).

*trump you with my CIM PG Diploma, MA in Mktg, Dr of Bus Admin (Mktg) and 40+ career in mktg management, consultancy and education... yet, yes, I still misnamed the Pareto Principle, though I do think a 20% penalty is a little harsh, especially as I used it in another posting ​

 

[NeilW]

I'm pretty sure most figure manufacturers have a sound basis for the prices they charge for their products which you may or not agree with.

Yes, a sound basis such as rampant profit maximisation. I'm not saying this happens in 'our market, but here's an interesting and far from atypical case from the 'ethical' pharmaceutical industry: https://www.nytimes.com/2015/09/21/...ncrease-in-a-drugs-price-raises-protests.html

If you feel a certain manufacturer's items are too expensive for you then that's unfortunate but, as the Rolling Stones said, you can't always get what you want.

Which is why (as I said in an earlier posting) I do not buy them.

Not being able to afford an item doesn't mean that you should go and buy the re-casts just because you really want it; just buy an original that you can afford.

Again, as I previously stated, I can afford them but am unwilling to buy: I don'y 'go and buy the re-casts'.

Would you apply this logic to everyday consumer items?

Yes, we frequently see how everyday consumer items such as furniture, whitegoods, electric/electronics, clothing, food etc etc etc are generally sold with low margins within a penetration strategy (other prestigious brands operate with high margin premium pricing).

 

[NeilW]

It seems you are here completely out of subject

I made it clear that I am not talking of Pegaso's high priced, museum quality range: however, Martin's question as to whether this was a new business model prompted my initial question.

And I can't disagree with your 'back to the basics' comment... don't forget that my original proposition was that lower prices would work AGAINST re-casters.

 

[Tommys War]

Neil, your hypothesis is plausible, but you're not full in possession of the full facts, namely demographics;

Modelling (and in particular historical figure modelling) is a very small market and declining quickly. The audience within the market is overwhelmingly male and I'd say averages 50+ years old, with many retirees. Yes, I could lower the price of my range and sacrifice turnover for more sales, but I'm not convinced that the uplift is sales would counter the loss of revenue, and I say this as someone who has been involved in the industry for ten years.

One common factor that I encounter constantly is that customers 1. over-estimate the size of the market and 2. under-estimate the cost of manufacturing goods. Nearly everyone that I know involved in the market are owner/operators. Put simply, there isn't the market for large-scale manufacturing. The market relies on enthusiasts like myself who work bloody hard to create good products, you can see why we then get angry when demands are made for us to dramatically cut prices so modellers can have more models - all done with the threat of recasts in the background.

I'm afraid it's a pipe-dream to think that businesses would drop their prices from £45 for a figure to £25 for a figure and the uplift would balance the loss of revenue, I can tell you with some degree of certainty that it's not the case.

I think your theory is sound, but you forget the basis - the market. You correctly say that as a small business dropping the price might not apply. However, I'd say nearly every company in the figure market is of a similar size to Tommy's War (and many are smaller). You appear to imply there are some large businesses in the market charging high prices, but I can only think of Pegaso (who are long established and going through a lot of changes) and Scale 75 (who are involved in wider modelling products), there really aren't these large businesses 'hoovering' up sales from poor unsuspecting modellers.
Businesses are charging £45 for a figure because that's the optimum price based on sales in order to help them break even.

I'm afraid if you think anyone is making money from selling historical model figures then you're hugely mistaken. Someone asked me recently how they could become a figure modelling millionaire. I told them to invest a £billion into a figure company and they would get there quickly! ;-)

In summary, as I said early only a few companies (if any) operate a 'high margin' strategy (and I honestly doubt if anyone is).

 

[rossbach]

I made it clear that I am not talking of Pegaso's high priced, museum quality range: however, Martin's question as to whether this was a new business model prompted my initial question.

And I can't disagree with your 'back to the basics' comment... don't forget that my original proposition was that lower prices would work AGAINST re-casters.

Sorry Neil for being blunt ....... but what you write simply gives me a headache

 

[NeilW]

People forget about the hidden costs of running a company and the big one for us is attending a multi day event so we have to factor in fuel, hotle and food on top of the event costs.

I don't: when I ran my mktg/training consultancy the costs to attend events/conferences/exhibitions, or just drive 500 miles + an overnighter to see a potential client with no business at the end of it, were my perennial headaches as well

When I was working for others I wouldn't think anything of it, but when as a small business it's coming out of your own pocket it's a different issue.

 

[NeilW]

Neil, your hypothesis is plausible, but you're not full in possession of the full facts, namely demographics;

Thanks Darren, good to see some knowledgeable and experiential evidence in your arguement.

I totally accept (and acknowledged) that I don't know enough about the market's characteristics to model it with any accuracy and your comment ref demographics is a case in point (and yes, I fit the profile). I also find your suggestion that I have gauged the size of manufacturers incorrectly interesting and probably correct (I did recognise that there's a stalwart core of hobbyist/enthusiasts running small scale businesses out there but you suggest that they're in the majority).

From everything that you've said it looks that my initial proposition may only hold true for those (perhaps few) large scale manufacturers who do operate a premium pricing strategy (pity really as I thought I'd cracked the re-casting problem ) .

So, thanks for you input

Neil

 

[NeilW]

Sorry Neil for being blunt ....... but what you write simply gives me a headache

Be as blunt as you wish... I've had worse

 

[Tommys War]

No problem Neil. To be fair your assumption is a common misconception. I've had people come up to me at model shows and tell me that my figures "cost 50p" to manufacture. The casting alone is far in-excess of 50p and even if it was, doesn't include the sculpt and other direct and indirect costs. Modellers like to think we figure companies are all dripping in money and making fortunes, if only!

The market is in many ways a 'perfect market' for modellers. Barriers to entry are low and there are both sculptors and casters actively looking for work. With a bit of research you could set-up a figure company and release your first figure easily within 6 months. The problem is that you won't see a return on your money. Many have fallen into this trap, thinking sales are guaranteed, when it's incredibly tough to survive.

Recasts are just a problem on top of the problem of the small market I'm afraid.

 

[Martin64]

My answer as a figure manufacturer and also someone with a degree in Marketing, and working as a Marketing Director;

In terms of my business, I price at £16.00 per figure with a discount for members of my Collectors Club (ie rewarding those who are most loyal to my brand) to £12.80.

I'd say that based on those numbers I offer exceptional value, and as far as I'm aware those manufacturers with similar products have the same pricing strategy and issues. I understand the concept of Price Elasticity of Demand, but from my perspective I'm priced as low as I can, any lower and it's at the point where I wouldn't invest in new releases.

I think you can understand from that why recasting is problematic - if modellers were to buy recasts of my figures I simply could not justify creating new products.
Yes, some figure companies do lift prices to create a premium product, but I'd say those are the overwhleming minority.

A most interesting answer by a person who knows what he is talking about as one out of the group of manufacturers - finally .
As a member of the Collectors Club that agrees to most of your points made so far may I polititely disagree to some extend:
As far as I am aware there are no recasts of Tommys War-products around. Why?
Maybe because of your listed prices for your excellent products. The regular price equals to about 18,50 Euro or 14,80 Euro for the Club members per figure. If you look at prices for recasts there is not a big gap between your price for an original and the price for an illegal copy.
So IMHO the reason for recasters to avoid your figures is not that they would not sell as copies but that they are aware that people will prefer your originals (and the recasters will not be able to make a big profit) as long as your prices are kept on such a level.
If I am right your reply backs some of the points made by NeilW - you do not allow a market for illegal copies of your products by offering this quality at an affordable prive level for hobbyists that IMHO will back you still if you stay within the range of customer`s "price resistance" described by NeilW but add a bit to make profit instead to break even.
If most of the manufacturers follow a premium pricing strategy I do not dare to say but this thread started about a Pegaso release and Pegaso paved the road for new price levels in all scales for a long time - why is their fire-sale so succesfull? Wouldn`t they have sold much more pieces at such a price in the past and would have recasts then been less detrimental to them? If the answer is yes, NeilW `s view would be backed another time.
Cheers, Martin

 

[CGS military figures]

A most interesting answer by a person who knows what he is talking about as one out of the group of manufacturers - finally .
As a member of the Collectors Club that agrees to most of your points made so far may I polititely disagree to some extend:
As far as I am aware there are no recasts of Tommys War-products around. Why?
Maybe because of your listed prices for your excellent products. The regular price equals to about 18,50 Euro or 14,80 Euro for the Club members per figure. If you look at prices for recasts there is not a big gap between your price for an original and the price for an illegal copy.
So IMHO the reason for recasters to avoid your figures is not that they would not sell as copies but that they are aware that people will prefer your originals (and the recasters will not be able to make a big profit) as long as your prices are kept on such a level.
If I am right your reply backs some of the points made by NeilW - you do not allow a market for illegal copies of your products by offering this quality at an affordable prive level for hobbyists that IMHO will back you still if you stay within the range of customer`s "price resistance" described by NeilW but add a bit to make profit instead to break even.
If most of the manufacturers follow a premium pricing strategy I do not dare to say but this thread started about a Pegaso release and Pegaso paved the road for new price levels in all scales for a long time - why is their fire-sale so succesfull? Wouldn`t they have sold much more pieces at such a price in the past and would have recasts then been less detrimental to them? If the answer is yes, NeilW `s view would be backed another time.
Cheers, Martin

Yes there are, and any quality product is recast, my mounted are now £45, the master alone was £2,400 before moulding, casting resin and boxart, I sell £95 free post worldwide. Even offering at a fair price we are raped by recasters, fair pricing has nothing to do with it. And dare I say Martin , you are heavy on comments but light on the wallet that you know very little about.
Cheers
Gra

 

[Babelfish]

With a bit of research you could set-up a figure company and release your first figure easily within 6 months. The problem is that you won't see a return on your money. Many have fallen into this trap, thinking sales are guaranteed, when it's incredibly tough to survive.

We've seen that on here a number of times over the years Darren, new companies (well ... one-man-bands really) arriving amid much hullaballoo and announcing cool new releases, only to vanish again not long afterwards. I'm not going to name any names but I can think of about half a dozen just off the top of my head. It's a shame really because the passion was clearly there but not a big enough market to generate the sales they needed to remain viable.

- Steve

 

[Martin64]

Yes there are, and any quality product is recast, my mounted are now £45, the master alone was £2,400 before moulding, casting resin and boxart, I sell £95 free post worldwide. Even offering at a fair price we are raped by recasters, fair pricing has nothing to do with it. And dare I say Martin , you are heavy on comments but light on the wallet that you know very little about.
Cheers
Gra

?? Did I state that I know anything about your wallet? But I admit that I learned more about it by reading the reply of Darren. Nevertheless nobody has sympathy for people that rape you - but this thread was about ideas to deal with recasts commercially if I got NeilW right. Your approach seems to me more to deal with the problem emotionally and if that works for you I am fine with it.
Cheers, Martin

 

[CGS military figures]

?? Did I state that I know anything about your wallet? But I admit that I learned more about it by reading the reply of Darren. Nevertheless nobody has sympathy for people that rape you - but this thread was about ideas to deal with recasts commercially if I got NeilW right. Your approach seems to me more to deal with the problem emotionally and if that works for you I am fine with it.
Cheers, Martin

No Martin, you basically said the reason why Tommy’s War hasn’t been recast was due to price, which is wrong as they have been and price is not relative to recasters. And second you questioned lower prices would equate more sales and less recasting, I got exactly your drift and no sitting on the fence changes it.
And bloody right emotional, as you would be if, as said, talking from the wallet
Cheers
Gra

 

[Martin64]

And bloody right emotional,

couldn`t agree more - I apologize for not being aware of recasts of Darren`s line and for my unwillingness to further reply to emotional messages on this thread.
Cheers, Martin

 

[Ronaldo]

Even the sculptors and boxart painters have the right to live from their work!

And if a figure is well sculpted, I'm also willing to pay more for it.

Also, we should not forget that the figure hobby is a luxury for most of us.

And if the manufacturers actually cut prices, then the recasters would still undercut them.

This "rat race" for the lowest price is not to win by honest editors.


My 2 cents...


Cheers

I know of one manufacturer who deliberately keeps his prices low and therefor does not get targeted by recasters as there is no r real profit by undercutting.

 

[Blind Pew]

What is true is this.
I am personally really grateful to the manufacturers. They give me a wonderful hobby.

 

[Ronaldo]

One thing seems to be forgotten here.

You dont go into business to make a wage you are in it for the money ,I wonder if any of the companies who buy masters and sell actually make money.
The guys that do ok are the ones who sell other people's products " Historex for example" there are other Brit companies in the same boat and good luck to them.

Cottage industries always struggle , if CGS forks out almost two and a half grand for a master and it gets recast no wonder he is emotional I would be wanting to crack sculls